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". . . banking is no longer somewhere you go, but something you do."1
-Brett King
1.INTRODUCTION
Technological innovation is transforming industries. Banking is no exception. The rise of firms applying innovative technology to the delivery of financial services ("FinTech") has attracted the attention of governments and financial regulators around the world.2 Regulators have recognized the need to balance the potential economic gains offered by FinTech against the risks of inadequate or poorly-informed regulation. Many have taken pro-active steps to educate themselves about the capabilities and implications of innovation in the financial sector and to avoid unduly burdensome regulation that might place their jurisdictions at a competitive disadvantage. These pro-active initiatives include, for example, the launch in several jurisdictions of regulatory "sandboxes"3 in which new technologies may be debuted on a limited scale within a relaxed regulatory environment to encourage and facilitate the development of financial technology.
One specific development that could significantly unleash the potential of FinTech for consumers of financial services is open banking. Open banking has been defined or described in a number of different ways. Some are highly technical; others involve some rhetorical flourish.4 A very simple explanation is that open banking refers to a regime in which banks, either voluntarily or in response to legislative or regulatory requirements, provide access to customer information in secure, digital form - with the customer's express consent - to third-party service providers (often FinTech companies). Those third parties can then deliver useful services to customers using that data, frequently in combination with data from other sources. Open banking initiatives being pursued in many jurisdictions typically contemplate mandating banks to provide customer information - at the customer's request - to authorized third parties through standardized open application programming interfaces (API). APIs are an integral part of current open banking initiatives. It is through standardized APIs that third-party financial service firms may develop and provide financial services to consumers frequently aggregating a consumer's financial information from different institutions and sources or providing various types of payment initiation services to replace the use of traditional payment methods such as credit or debit cards. The complete range of services that might eventually be designed and provided to financial services consumers in a world of fully open banking is...