Consent is the cornerstone that empowers individuals to control their financial data in today’s interconnected digital economy. As open finance evolves, understanding how consent functions within this framework is critical for regulators, financial institutions, tech providers, and end users alike.
In this article, we will explore the role of consent in open finance, examine key policy frameworks, delve into practical design considerations, and offer recommendations for building robust, user-centric consent mechanisms that inspire consumer trust and confidence.
What Is Open Finance and Why Consent Matters
Open finance extends the principles of open banking beyond payment accounts to encompass a broad range of financial products including savings, investments, pensions, insurance, and credit. Under an open finance regime, customers grant permission for authorized third parties to access and use their financial data via secure APIs.
- It broadens data sharing to all financial products under customer-permissioned access.
- It relies on standardized, secure interfaces to facilitate data portability and interoperability.
- It places the individual at the center, ensuring they exercise control through informed consent.
At its core, open finance rests on the principle of consumer-centric data governance. Without explicit, informed, and revocable consent, the entire ecosystem would lack legitimacy and fail to deliver promised benefits such as tailored financial advice, alternative credit scoring, and new competitive services.
Policy and Framework Context
Regulators and industry bodies around the world have recognized that consent must be central to any open finance architecture. Several influential frameworks highlight this connection.
- CGAP / BIS “Key Considerations for Open Finance” (2022): Defines open finance as customer-permissioned data sharing and embeds consent in the operational flow
- AFI Policy Guide for Inclusive Open Finance (2025): Places consent under Pillar 2 (Ecosystem Design and Participants), linking it to data ownership, user rights, and trust objectives.
- OECD Open Finance Policy Considerations (2023): Emphasizes the need for clear legal bases and robust consent management to unlock innovation while preserving consumer protection.
- EBF Open Finance Paper (2023): Stresses data protection and consumer rights as essential design elements, with consent at their heart.
National and regional regulations further illustrate how consent is operationalized:
These examples demonstrate how clear legal anchors and regulatory mandates ensure that consent is not an afterthought, but an integral part of open finance design.
Core Characteristics of Quality Consent
Based on regulatory guidance and industry best practices, high-quality consent in an open finance setting should exhibit the following attributes:
- Explicit and affirmative: Users must take a clear action (e.g., clicking “Authorize”) after reviewing terms.
- Informed and transparent: Information on who accesses data, what data, why, and for how long must be clearly presented.
- Specific and granular: Consent must be tailored to particular accounts, data categories, and functions (read vs. write).
- Time-bound and revocable: Access periods should expire automatically, and users can withdraw consent at any time.
- Documented and auditable: Every consent event is logged with metadata (timestamp, scope, channel).
- Unbundled from other services: Consent must stand alone and not be conditional on unrelated offerings.
Operational Flows: Bringing Consent to Life
Implementing consent in practice involves distinct operational steps that separate user intent from technical authentication and system authorization:
- 1. Service initiation: A third-party provider (TPP) requests access to a user’s account data.
- 2. Consent journey: The user is guided through selecting the data holder, data types, and purpose(s).
- 3. Consent screen: A clear interface displays TPP identity, data scope, purpose, and duration.
- 4. Authentication: The user logs in to their financial institution with strong customer authentication.
- 5. Consent recording: The data holder or consent manager logs the consent event with full details.
- 6. API data access: The authorized data transfer occurs under the constraints of the recorded consent.
By structuring the flow in this way, open finance ecosystems ensure that consent is not conflated with authentication or back-end authorization logic, but stands alone as the user’s explicit permission.
Design Patterns and Implementation Best Practices
Building effective consent experiences requires attention to interface design, user education, and technical enforcement:
- Use progressive disclosure: present essential information first, allow users to drill down into details.
- Employ a consent dashboard: give users a unified view to review, modify, and revoke consent agreements.
- Implement real-time enforcement: revocations take effect immediately across all systems.
- Integrate audit logs and user notifications: alert users to upcoming expirations and usage summaries.
Adopting these patterns also helps mitigate common risks such as consent fatigue and overload, where users become desensitized to frequent requests, and dark patterns, which undermine transparent decision-making.
Risks and How to Mitigate Them
Despite its promise, open finance introduces new risks around data misuse, security breaches, and diminishing user control:
- Privacy erosion: Broad data sharing can expose sensitive information if consent scopes are too expansive.
- Security vulnerabilities: APIs and consent management platforms must be fortified against attacks.
- Misaligned incentives: Providers may design consent flows optimized for acceptance rather than clarity.
To mitigate these risks, organizations can:
- Enforce the principle of least privilege: only grant access to data necessary for the specified purpose.
- Provide clear, contextual education: explain the benefits and trade-offs of consent decisions.
- Maintain robust vendor governance: vet third parties and monitor their data handling practices.
Looking Ahead: Building Trust and Innovation
As open finance matures, the central role of consent will become even more pronounced. Emerging technologies such as privacy-enhancing cryptography and decentralized identity hold the potential to strengthen user control while preserving interoperability. Global efforts toward common data standards will further streamline consent management across borders.
Ultimately, realizing the full promise of open finance depends on fostering an environment where users feel secure granting access, where providers honor time-bound consent periods, and where regulators ensure continual adherence to fair, transparent practices.
By embracing these principles and investing in user-centric consent frameworks, stakeholders can catalyze a new era of financial inclusion, competition, and personalized services—anchored in trust, control, and shared value.
Let us move forward together, crafting open finance ecosystems that respect every individual’s right to decide how their financial data is used.
