Open Banking: Credit Market Competition When Borrowers Own the Data

Zhiguo He (), Jing Huang and Jidong Zhou ()
Additional contact information
Jing Huang: University of Chicago, Booth School of Business

No 2262R, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: Open banking facilitates data sharing consented to by customers who generate the data, with the regulatory goal of promoting competition between traditional banks and challenger fintech entrants. We study lending market competition when sharing banks’ customer transaction data enables better borrower screening. Open banking can make the entire financial industry better off yet leave all borrowers worse off, even if borrowers have the control of whether to share their banking data. We highlight the importance of the equilibrium credit quality inference from borrowers’ endogenous sign-up decisions. We also study extensions with fintech affinities and data sharing on borrower preferences.

Keywords: Open banking; Data sharing; Banking competition; Digital economy; Winner's curse; Privacy (search for similar items in EconPapers)
JEL-codes: G21 L13 L52 O33 O36 (search for similar items in EconPapers)
Pages: 58 pages
Date: 2022-03
New Economics Papers: this item is included in nep-ban, nep-com, nep-pay and nep-reg
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (1)

Downloads: (external link)
https://cowles.yale.edu/sites/default/files/files/pub/d22/d2262-r.pdf (application/pdf)
Our link check indicates that this URL is bad, the error code is: 404 Not Found

Related works:
Journal Article: Open banking: Credit market competition when borrowers own the data (2023)
Working Paper: Open Banking: Credit Market Competition When Borrowers Own the Data (2020)
Working Paper: Open Banking: Credit Market Competition When Borrowers Own the Data (2020)
Working Paper: Open Banking: Credit Market Competition When Borrowers Own the Data (2020)
This item may be available elsewhere in EconPapers: Search for items with the same title.

Export reference: BibTeX RIS (EndNote, ProCite, RefMan) HTML/Text

Persistent link: https://EconPapers.repec.org/RePEc:cwl:cwldpp:2262r

Ordering information: This working paper can be ordered from
Cowles Foundation, Yale University, Box 208281, New Haven, CT 06520-8281 USA
The price is None.

Access Statistics for this paper

More papers in Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University Yale University, Box 208281, New Haven, CT 06520-8281 USA. Contact information at EDIRC.
Bibliographic data for series maintained by Brittany Ladd ().