Digital innovation and regulation are moving at warp speed all around the world, with the latest focus being on open banking and open finance; an industry positioned to transform the way people bank and interact with financial services providers. Open banking allows banks and fintechs to collaborate to deliver new and innovative solutions in a highly secure environment. While open banking models can stimulate innovation, lower the cost of product development, encourage creative partnerships, and contribute to overall industry growth there are potential security risks regarding institutions’ access and management of customer data.

Data-sharing agreements and, potentially, government regulations are essential for the industry’s safe growth. Around the world, conversations about what those agreements and regulations should look like are going full steam ahead, with many countries codifying guidance for this exciting industry. API standardization efforts are either centrally created by regulator-driven working groups or laid out by industry players as market-driven solutions.

While the way forward in terms of open banking and open finance regulation remains to be seen, what can’t be denied is the importance it has for the future of finance.