Open banking and different regulatory contexts

The finance industry is changing rapidly with the rise of new technologies and the implementation of new regulations that influence how financial data is treated and shared across industries.

The development of open banking, and with it open finance and open data, has put access to consumer data at the centre of competitive advantage. Data that can be shared securely can be leveraged for more innovative and tailored services - including financial, energy, healthcare, and education amongst others. This is changing how financial firms compete and who with.

Our research examines:

• How incumbent and entrepreneurial firms adapt to changes in the regulatory frameworks in their national context. 
• The different regulatory contexts in developed and developing countries and the advantages and disadvantages that these differences make.
• What are regulatory best practices for creating a level playing field in finance between a) new entrants and incumbents, and b) dedicated financial players and big tech platforms?

Drawing on this research, regulators and entrepreneurs will be able to identify how to host or create a level playing field for data access, while financial incumbents can assess how they may want to go about accessing innovations via investment, acquisitions and partnerships. The injection of fresh approaches and alternative skill sets from new competitors, including indirect competition from large tech platforms with overlapping interests, will evolve industry best practice.

As part of this research, special attention is given to the entry of platform firms into the financial sector. Their presence could completely change the sector with the likes of Amazon and Google having the potential to replace incumbents and sweep away independent innovative entrepreneurs.

The efforts of platform firms are to a certain extent facilitated by the changing regulations that allow financial data to be shared more democratically. This creates concerns for regulators making financial markets more oligopolistic while trying to democratise them.