WASHINGTON—With security at the forefront of U.S. financial institutions’ concerns regarding open banking, a new report reveals the financial innovation’s security track record has been good.
As CUToday.info reported, the CFPB has finalized the Personal Financial Data Rights Rule—which will begin to be phased in during 2026.
With U.K. financial institutions well ahead of their U.S. counterparts in working with open banking, GlobalData cited security data from the U.K. that shines a light on the new banking system.
However, the rule is already facing a legal challenge, and concerns have been formally raised by one bank trade group about consumer data security.
“Fortunately, there haven’t been any major breaches of open banking security yet, and based on its performance so far, it might even be safer than traditional finance,” GlobalData said. “News of that high level of safety doesn’t seem to have reached the public however: Just 16% of the public believe that it is completely safe.”
Do Consumers Understand Open Banking?
GlobalData said data also show that 60% of the public actually understand what open banking is.
“It’s likely that plenty of the ten million people in the U.K. who use open banking are unaware that the products they are using are based in open banking – they just see a useful budgeting app or a fairer borrowing system,” GlobalData said.
“To educate the public and build confidence about the safety of open banking, we must double down on the safety of existing open banking systems. Using the kind of technology that Chargebacks911 deploys to pinpoint the signs of fraud to counter them would allow individual open banking users to build a reputation for safety. For the general public, seeing that the apps and services they already trust are part of a larger ecosystem called ‘open banking’ would go a long way to establishing the technology as safe,” GlobalData added.