Customer Data Access and Fintech Entry: Early Evidence from Open Banking

Tania Babina, Saleem Bahaj, Greg Buchak, Filippo De Marco, Angus Foulis, Will Gornall, Francesco Mazzola and Tong Yu

No 18797, CEPR Discussion Papers from Centre for Economic Policy Research

Abstract: Open banking (OB) empowers bank customers to share transaction data with fintechs and other banks. 49 countries have adopted OB policies. Consumer trust in fintechs predicts OB policy adoption and adoption spurs investment in fintechs. UK microdata shows that OB enables: i) consumers to access both financial advice and credit; ii) SMEs to establish new fintech lending relationships. In a calibrated model, OB universally improves welfare through entry and product improvements when used for advice. When used for credit, OB promotes entry and competition by reducing adverse selection, but higher prices for costlier or privacy-conscious consumers partially offset these benefits.

Keywords: open banking; data access; entrepreneurship; Financial regulation (search for similar items in EconPapers)
JEL-codes: G21 G23 G24 G28 G50 K21 L10 L51 O31 O36 O38 O50 (search for similar items in EconPapers)
Date: 2024-02
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Related works:
Journal Article: Customer data access and fintech entry: Early evidence from open banking (2025)
Working Paper: Customer data access and fintech entry: early evidence from open banking (2024)
Working Paper: Customer Data Access and Fintech Entry: Early Evidence from Open Banking (2024)
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