In a recent move, the Consumer Financial Protection Bureau (CFPB) introduced a proposed rule that is reported to potentially accelerate the shift towards open banking. The development took place on October 19th and is the latest among similar global trends in the space of financial technology, otherwise known as fintech. Details of the proposal reveals that it is not just a leap towards technological advancement, but also encapsulates careful considerations for data protection.
The proposed rule, as stated by the CFPB, is aimed at providing consumers with greater control over their financial data. This certainly aligns with global calls for higher transparency in data use, specifically financial data, in both private and public sectors. In doing so, it also offers new safeguards against potential misuse of consumers’ data by companies; a crucial aspect in today’s era where data breaches and unregulated data transactions are frequent.
The initiative is an important step forward, not just for open banking but for the broader fintech sector. If approved, this rule would mean a major shift in how we understand and apply the concepts of financial data and open banking.
The proposed rule has been put forth by Orrick, Herrington & Sutcliffe LLP, a renowned international law firm specialised in technology, energy & infrastructure and finance sectors.