Open banking is poised to redefine the financial services landscape in North America, promising to unlock new value for consumers, banks, and fintechs alike. While the concept has already transformed markets in Europe and Asia, North America’s journey is uniquely shaped by its regulatory environment, consumer expectations, and competitive dynamics. Understanding these nuances is essential for financial institutions seeking to lead in the next era of digital finance.
Open banking refers to the practice of banks and financial institutions sharing customer data securely with third-party providers via application programming interfaces (APIs), with the customer’s consent. This enables a host of new services, from seamless payments to personalized financial management tools. In North America, the open banking market is expected to reach $43 billion by 2026, with a projected compound annual growth rate of 26.5%—the highest globally.
However, the region’s progress has been slower and more fragmented compared to Europe and Asia. In the European Union, the Revised Payment Services Directive (PSD2) and the UK’s Open Banking initiative have mandated data sharing and established clear regulatory frameworks. This has led to widespread adoption, standardized APIs, and a flourishing ecosystem of fintech innovation. In Asia, government-issued digital banking licenses and rapid digital adoption have driven similar momentum, with super-apps and platform-based models reshaping consumer expectations.
In contrast, North America—particularly the United States—lacks a unified regulatory mandate for open banking. While Canada is making strides with its own open banking roadmap and regulatory bodies like the Open Banking Implementation Entity (OBIC), the U.S. landscape remains largely market-driven. Banks and fintechs are left to define their own standards, resulting in a patchwork of approaches and a slower pace of adoption.
The absence of a clear regulatory framework in the U.S. creates both uncertainty and opportunity. On one hand, banks are not compelled to open their data, which slows the development of standardized APIs and limits interoperability. On the other, this regulatory ambiguity allows forward-thinking institutions to shape the market, experiment with partnerships, and define best practices before formal rules are established.
Canadian regulators are moving more decisively, working to establish governance controls and data standards that will enable secure, customer-consented data sharing. As these frameworks mature, North American banks will need to align their strategies with evolving compliance requirements, data protection guidelines, and cyber risk management protocols.
Consumer adoption of open banking in North America will be driven less by convenience and more by trust. Customers are increasingly aware of data privacy risks, especially in light of high-profile breaches and concerns over how big tech firms use personal information. For open banking to succeed, financial institutions must prioritize robust security, transparent data usage policies, and clear value propositions that empower customers to make informed choices.
Open banking offers tangible benefits for consumers:
For North American banks, the journey to open banking readiness requires a fundamental rethinking of technology and operating models. Legacy systems, often siloed and inflexible, present significant hurdles to API integration and real-time data sharing. Banks must invest in modern, cloud-native architectures, robust API management platforms, and agile development practices to deliver the seamless, secure experiences customers expect.
Key steps include:
Open banking is intensifying competition—not just among banks, but also between banks, fintechs, and non-traditional players. Fintechs are rapidly innovating, offering financial management, payments, and lending solutions that leverage open data. Meanwhile, big tech companies are exploring embedded finance, integrating banking services into their platforms and ecosystems.
For traditional banks, the risk is disintermediation: becoming mere infrastructure providers while customer relationships and value shift to more agile, customer-centric competitors. To avoid this fate, banks must:
To prepare for and capitalize on open banking’s arrival, financial institutions should:
Open banking is not a question of if, but when, for North America. The region’s unique regulatory and market dynamics present both challenges and opportunities. By acting now—modernizing technology, building trust, and embracing ecosystem thinking—banks and fintechs can position themselves as leaders in the next wave of digital financial services. Those who wait risk being left behind as the industry transforms around them.
The time to prepare is now. Open banking will reward those who are ready to innovate, collaborate, and put the customer at the center of everything they do.