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 C.E.P.R. Discussion Papers

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
References: Add references at CitEc
Citations:

Downloads: (external link)
https://cepr.org/publications/DP18797 (application/pdf)
CEPR Discussion Papers are free to download for our researchers, subscribers and members. If you fall into one of these categories but have trouble downloading our papers, please contact us at subscribers@cepr.org

Related works:
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)
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:cpr:ceprdp:18797

Ordering information: This working paper can be ordered from
https://cepr.org/publications/DP18797

Access Statistics for this paper

More papers in CEPR Discussion Papers from C.E.P.R. Discussion Papers Centre for Economic Policy Research, 33 Great Sutton Street, London EC1V 0DX.
Bibliographic data for series maintained by ().