By Ray Birch
MIAMI—One financial expert believes the move to open banking in the U.S. will provide a big lift for consumers, allowing greater and more informed choices of financial products, better ability to budget and, overall, an improved balance sheet.
WalletHub CEO Odysseas Papadimitriou said he thinks that will even lead to a decline in delinquencies and less credit card debt.
“I see also savings increasing—investment and retirement accounts increasing. I see consumers wasting less money on sub-optimal financial products. I see better financial decisions being made and less debt,” he told CUToday.info.
As CUToday.info reported, the CFPB has finalized its Personal Financial Data Rights Rule—which will begin to be phased in during 2026.
This type of change in financial services has been long overdue, Papadimitriou said.
“The Consumer Financial Protection Bureau has been very delinquent in finalizing a regulation related to open banking. Open banking is the standard in Europe,” Papadimitriou said. “This is a pro-consumer measure, which says the data belongs to the consumer, it doesn't belong to a particular bank or lender. So, with the consumer's consent, others can have access to their information. I don't see any drawbacks for consumers, I only see upsides.”
Open banking will help consumers budget and track their financials and identify opportunities where they can make improvements, said Papadimitriou, whose company offers consumers financial management services.
“They will be better able to track their spending, know what they are spending on necessities versus what they're spending on nice-to-haves,” he said.
Having access to the consumers’ data about where they're spending, what their balances are, the interest rates on different accounts, is the key to helping financial services providers to deliver good advice to consumers.
“For example, if you come to me and say I want to save $500 a month, I cannot tell you how to save $500 a month unless I get some additional information from you. Well, now, consumers can make that information accessible to others,” Papadimitriou said.
Helping consumers today make those decisions has not been a smooth process, Papadimitriou said.
Connectivity Issues
“At WalletHub, we are already helping consumers to manage their finances. But there's still connectivity issues,” Papadimitriou said. “For example, you might not be able to hook up a particular bank’s account on your wallet. You might not be able to connect to your American Express or Macy's card on your wallet. But this can be very important to someone, to be able to connect to their primary credit cards, since they make a lot of purchases with them.”
Papadimitriou reminded that within the current financial services environment there is no requirement for financial institutions to “play ball.”
“Some banks make it easier than others to get this data, and some make it harder,” he said. “What this new rule does is standardize information sharing and makes it a requirement, if the consumer consents. This levels the playing field.”
Papadimitriou asserted that banks have been resisting this change because they understand that customers will be able to get better financial advice, and as a result they may choose to switch away from “suboptimal” products.
“It creates more competition for banks, essentially,” he said. “If I'm getting 5% on my savings account and another is paying me 1%, services like WalletHub will immediately pick up on that and recommend switching that 1% account to another bank.”