Open finance is emerging as the next major phase of digital finance, extending beyond bank-centric data sharing to encompass savings, investments, pensions, insurance and credit. At its heart lies consumer control over their data, empowering individuals to direct when, how and with whom their information is shared. This shift promises to unlock innovation, competition and inclusion—provided that consumers retain true authority over every data exchange.
Understanding Open Finance and Its Scope
While open banking focuses on customer-permissioned access to payment and account data via APIs, open finance broadens this model to cover nearly all financial products and services. Third-party providers (TPPs) can now build personalized experiences across savings, investments, insurance, loans and non-financial sectors such as healthcare.
Regulatory initiatives like PSD2 in Europe and the UK Open Banking framework laid the groundwork. Today, entities like Plaid describe open finance as enabling consumers to access to personalized financial experiences by securely sharing data with any authorized provider. The distinction is clear: open banking remains bank-centric, whereas open finance is ecosystem-wide and consumer-centric.
The Pillars of Consumer Control
- Explicit, informed consent before any data sharing
- Granular permissions for accounts, data types and purpose
- Easy revocability to withdraw access at any point
- Transparent disclosures about usage, retention and fees
- Portability and choice to switch providers seamlessly
- Robust security and privacy guarantees
These elements form the foundation of trust in open finance. By insisting on explicit, informed and verifiable consent, platforms ensure consumers know exactly what they share, why and for how long. Transparency bolsters confidence, while revocability places ultimate authority in consumers’ hands.
Design Principles Fueling Trust and Innovation
Open finance regimes worldwide adhere to consistent design features that reinforce consumer authority and spur market growth:
Combined with strong technical and legal safeguards, these principles ensure that data sharing happens only under strict conditions, preserving privacy and security while enabling TPPs to develop new services rapidly.
Market Momentum and the Critical Role of Trust
The global open banking market reached USD 30.0 billion in 2024 and is projected to hit USD 127.7 billion by 2033, growing at a 16.6% CAGR. In the U.S., revenues climbed to approximately USD 7.1 billion in 2024 and are forecast to exceed USD 30.9 billion by 2030, with a 27.9% CAGR.
Open finance is scaling even faster. Allied Market Research estimates its market size will reach USD 43.2 billion by 2026 at a 24.4% CAGR. In the UK, open finance users doubled from 18 million in 2019 to 40 million in 2021. Globally, more than 132 million active users engage with open finance ecosystems today, driving over 330 billion transactions annually.
These figures underscore that access to personalized financial experiences is not a niche demand but a mainstream expectation. Sustaining this momentum rests on unwavering consumer trust and control, without which adoption will stall.
Institutional Support and Regulatory Foundations
Regulators worldwide are codifying data rights to enshrine consumer authority in law. Under GDPR and CCPA, data processing demands a lawful basis—often consent—alongside rights to access, rectify, delete and port personal data. Open finance platforms must comply with these regimes to operate lawfully.
Guidance from CGAP and the UK’s FCA/ICO emphasizes clear rules for customer-permissioned data access, requiring that all market participants, from banks to fintechs, adhere to robust consumer and data protection standards. By embedding these legal guardrails, regulators ensure that right to withdraw consent at any time remains more than a slogan—it becomes enforceable.
Case Studies and Success Stories
In the UK, Open Banking standards catalyzed rapid innovation: budgeting apps use transaction data to offer real-time insights, while switching services let consumers move mortgages or savings accounts in minutes. These successes demonstrate how consumer-centric design drives adoption.
In Australia, the New Payments Platform (NPP) and Consumer Data Right (CDR) initiatives have empowered consumers to share electricity, telco and banking data with comparison sites, saving households time and money. Early adopters report improved financial outcomes and greater market competition.
Emerging markets benefit profoundly: in Latin America, open finance pilots leverage alternative data—such as mobile payment histories—to underwrite micro-loans, expanding access to credit for previously excluded populations. This approach exemplifies financial inclusion for underserved populations through data empowerment.
Practical Steps for Consumers and Providers
- Consumers: Review and manage your data permissions in app settings regularly.
- Providers: Implement clear, user-friendly consent flows and transparency reports.
- Fintechs: Adopt standardized APIs and privacy-by-design development methods.
- Regulators: Monitor compliance and update guidelines to reflect evolving risks.
By taking these steps, all stakeholders can foster an environment where innovation thrives without compromising consumer sovereignty. Leveraging secure and standardized API interfaces ensures that data sharing is both seamless and safe.
Conclusion: Empowering Consumers for an Inclusive Future
Open finance holds the promise of a more competitive, innovative and inclusive financial ecosystem. Yet its success hinges on one irrefutable truth: true progress requires that consumers retain meaningful control over their data. By embedding consent, transparency, security and revocability at every layer, the industry can build lasting trust, unlock new markets and ensure that everyone benefits from the digital finance revolution.
