Open finance holds transformative potential—enabling consumers and businesses to share their financial data securely across providers, driving competition, innovation, and financial inclusion. But realizing these benefits depends on one critical condition: effective oversight. This working paper argues that supervision must be built into the foundation of any open finance framework, not treated as an afterthought.
This paper identifies the core supervisory priorities financial service authorities (FSAs) should focus on in the early years of implementation: monitoring API performance and ecosystem health, ensuring that consent journeys are transparent and fair for consumers, guarding against fraud and data misuse, and tracking whether open finance helps achieve the stated policy objective. These priorities reflect a broader shift in supervisory philosophy—from monitoring rule compliance to actively monitoring whether open finance is delivering on its stated policy goals.
Key points:
- Start early when the regime is being designed.
- Adopt a risk-based approach, with robust oversight as the foundation, and leverage existing models, skills, resources, and structures.
- Embed policy goals in oversight and supervision and focus on key priorities for the initial years of implementation.
- Ensure open finance oversight specialization and close collaboration between oversight and supervision.
- Focus on prompt corrective measures while using enforcement powers as a credible deterrent.
