Open Finance Is Exploding Globally. Why is the U.S. Lagging?

Why Global Innovation Is Still Heavily Influenced by Regulation

While proactive and deliberate openness is paramount for banks in their open finance strategies, regulatory frameworks still have a significant impact. Several leading nations have established clear regulatory frameworks to empower banks and fintech companies and accelerate innovation.

An example is Brazil, whose central bank continues to advance its groundbreaking open finance agenda. With 96 billion API calls monthly, their initiatives have had a substantial impact. Looking ahead, Brazil plans to introduce Banking-as-a-Service (BaaS) regulatory frameworks and further enhancements to its successful instant payment network, Pix. These steps explicitly aim to foster greater financial inclusion, transparency, and interoperability, placing Brazil at the forefront of open finance innovation worldwide.

The UK leads among “Champion” countries, advancing aggressively through the Joint Regulatory Oversight Committee’s ambitious 2025 roadmap. The UK’s proactive Data (Use and Access) Bill and upcoming long-term regulatory framework aim to supercharge a USD 13 billion smart data economy. UK’s regulatory excellence stems from decades of ecosystem-centric policymaking.

India, equally ambitious, leverages the India Stack and Account Aggregators to operationalize secure, consent-driven sharing of data. This unique model is expanding financial inclusion and driving innovation across India’s financial landscape. India’s rapid scale in open finance highlights the potential of public-private partnerships executed on a central tech backbone like India Stack.

Singapore notably adopts a more market-driven stance. The Monetary Authority of Singapore (MAS) provides strategic guidance, oversight, and vital resources such as APIX, regulatory sandboxes, and API registries, while banks and fintechs lead ecosystem development through collaborative, customer-centered solutions.

In contrast, “Enthusiasts” such as the United States and China exhibit substantial market initiatives despite regulatory frameworks that are still stabilizing. In China, market innovation driven by technology giants such as Tencent and Alibaba showcases rapid progress, though explicit open finance regulations remain limited.

Building a Stronger Banking Future Through Openness

Banks enjoy unparalleled strengths: customer trust built over decades, sophisticated risk management expertise, deep regulatory experience, and mature governance processes. These strengths uniquely position them to lead the strategic shift toward openness in financial services — not by abandoning control, but rather by deploying an evolved, strategic form of it. Rather than viewing openness as surrendering autonomy or creating vulnerability, banks should understand it as a means to extend their trusted reputation and robust risk culture across broader ecosystems.

For instance, JPMorgan’s partnership with Walmart in embedded payments through the Walmart Marketplace has enabled U.S. merchants to seamlessly manage payments and cash flow in JPMorgan’s robust financial infrastructure.

Another example is Santander UK which scaled card repayment innovation with embedded payments offered via a partnership with Token.io. The collaboration allowed customers to initiate repayments directly from over 90 UK banks without leaving the Santander mobile app. The innovation not only created a more seamless experience for the account holder, but also improved security and compliance through full alignment with Strong Customer Authentication (SCA) regulations without added login friction.