EconPapers    
Economics at your fingertips  
 

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 2262, Cowles Foundation Discussion Papers from Cowles Foundation for Research in Economics, Yale University

Abstract: Open banking facilitates data sharing consented by customers who generate the data, with a regulatory goal of promoting competition between traditional banks and challenger fintech entrants. We study lending market competition when sharing banks' customer data enables better borrower screening or targeting by fintech lenders. Open banking could make the entire financial industry better off yet leave all borrowers worse off, even if borrowers could choose whether to share their data. We highlight the importance of equilibrium credit quality inference from borrowers' endogenous sign-up decisions. When data sharing triggers privacy concerns by facilitating exploitative targeted loans, the equilibrium sign-up population can grow with the degree of privacy concerns.

Keywords: Open banking; Data sharing; Banking competition; Digital economy; Winner's curse; Privacy; Precision marketing (search for similar items in EconPapers)
Pages: 59 pages
Date: 2020-11
New Economics Papers: this item is included in nep-ban, nep-com and nep-pay
References: View references in EconPapers View complete reference list from CitEc
Citations: View citations in EconPapers (14)

Downloads: (external link)
https://cowles.yale.edu/sites/default/files/files/pub/d22/d2262.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) Downloads
Working Paper: Open Banking: Credit Market Competition When Borrowers Own the Data (2022) Downloads
Working Paper: Open Banking: Credit Market Competition When Borrowers Own the Data (2020) Downloads
Working Paper: Open Banking: Credit Market Competition When Borrowers Own the Data (2020) Downloads
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:2262

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 ().

 
Page updated 2025-03-30
Handle: RePEc:cwl:cwldpp:2262