Open Finance: The Evolution Beyond Open Banking

Open banking improved how consumers share and use payment account data, but it covers only a fraction of real financial life. Open finance extends the same consent-based, API-driven data access to pensions, investments, insurance, mortgages, loans, and savings, enabling a complete, unified view of financial health. Regulatory frameworks in the EU, UK, and elsewhere are still evolving, but jurisdictions like Brazil show that broad-scope open finance can materially reshape financial services, competition, and consumer outcomes.

• Open banking’s scope is structurally limited: It excludes pensions, investments, insurance policies, and full loan terms, preventing truly holistic financial planning and advice.
• Open finance expands consent-based data sharing to savings, investments, pensions, insurance, credit, and mortgages, enabling retirement planning, insurance optimization, and more accurate credit assessments.
• Regulation is emerging, not mature: The EU’s Financial Data Access framework (FiDA) and the UK’s Smart Data–driven approach are unlikely to deliver fully operational open finance ecosystems before 2026–2027.
• Brazil demonstrates what’s possible: Mandatory participation, strong central bank leadership, and integration with Pix show how open finance can scale quickly when designed holistically from the start.
• Execution risks remain high: Data standardization, consent management, privacy safeguards, and platform concentration will determine whether open finance empowers consumers or simply shifts control to new intermediaries.

Open banking transformed how consumers interact with their transaction accounts and payment services. But bank accounts represent only one component of most people’s financial lives. Pensions, investments, insurance policies, mortgages, savings products, and credit arrangements all hold crucial information about financial health and options. Open finance represents the logical extension of open banking principles to this broader financial landscape, promising more comprehensive visibility and control over financial data across all products and providers.

Understanding where open finance is heading, and why it matters, requires examining both the limitations of current open banking scope and the opportunities that emerge when data sharing extends across the entire financial services ecosystem.

Why Open Banking Isn’t Enough

Open banking has delivered substantial benefits within its defined scope. In regions with established open banking frameworks, consumers can aggregate transaction accounts from multiple banks, initiate payments from their accounts, share transaction history with lenders, and use services that rely on access to payment account data. These capabilities have enabled innovation in budgeting, financial management, lending decisions, and payment services.

However, open banking is limited to payment accounts and related transaction data. It generally does not provide visibility into pension balances or retirement account allocations. It does not include detailed information about insurance policies, premiums, or coverage terms. Investment portfolios, performance data, and asset allocation across brokerage or retirement accounts are typically excluded. Mortgage and loan information is also limited, often appearing only as repayment transactions rather than full balances, interest rates, or contractual terms.

Open finance extends data access, subject to consumer consent, to loans, pensions, insurance, investments, and mortgages, providing a more complete view of a customer’s financial position. This broader scope enables services that open banking alone cannot fully support, including holistic financial planning, retirement readiness assessments, insurance coverage analysis, and wealth management strategies that integrate banking, investments, and long-term savings into a unified financial picture.

The Regulatory Foundation Taking Shape

While open banking is operational in many jurisdictions, open finance remains largely in development from a regulatory perspective. The frameworks being designed aim to extend the principles proven through open banking, consumer control, secure API-based access, explicit consent, standardized data formats, to broader financial services.

In the European Union, the Financial Data Access framework introduced in June 2023 is designed to set the rules for open finance. FiDA would cover loans and mortgages including balances, conditions, and transactions; savings and investments such as shares, insurance-based investments, crypto-assets, real estate, and income generated; and occupational pensions built up in workplace pension schemes.

The proposed regulation introduces important innovations beyond open banking. It establishes compensation models where data holders such as banks or insurers can charge reasonable fees to data users such as fintechs, addressing a PSD2-era imbalance where banks bore all infrastructure costs. It requires firms to establish permission dashboards giving customers centralized control over data sharing across all financial services. And it enables both data holder and data user roles, allowing firms to both provide data and consume data from others.

FiDA has been politically contentious, particularly regarding whether large technology companies should access European financial data. Reports suggest European institutions are likely to exclude US BigTech firms, restricting access to EU-regulated financial institutions and licensed third parties. This reflects concerns about competition, sovereignty, and whether giving global platforms direct access to European financial data would fundamentally reshape the competitive landscape.

The timeline for FiDA implementation extends well beyond initial hopes. Even under optimistic scenarios, FiDA would only start to take shape around 2027, with an 18-month implementation period after entry into force. The regulation must still complete negotiations between the European Parliament, Council, and Commission before final adoption.

In the United Kingdom, the FCA expects regulatory foundations for the first open finance scheme to be in place by the end of 2027. The approach builds on the Smart Data initiative and the Data (Use and Access) Act 2025, extending consumer data rights beyond banking to other financial services sectors.

In March 2025, the FCA ran an Open Finance Sprint bringing together over 100 stakeholders to explore practical foundations. Participants identified key building blocks including standardized data across transactions, savings, investments, and credit records; common API standards and infrastructure; transparent consent mechanisms; and frameworks for trust and accountability. The collaborative approach reflects recognition that delivering open finance requires participation from financial firms, technology providers, regulators, consumer groups, and businesses.

Practical Applications: What Open Finance Enables

The expanded data scope of open finance enables services that are not fully achievable through open banking alone. These use cases illustrate the practical value proposition driving regulatory interest and development across multiple jurisdictions.

Comprehensive financial dashboards could aggregate not only transaction accounts but a broader range of financial products, including pensions with accumulation data and projections, investment portfolios with current valuations and performance, insurance policies with coverage details and premiums, and mortgages or loans with balances and terms. This broader visibility supports better financial decision-making by reducing the fragmentation that currently requires consumers to track information manually across multiple providers.

Personalized credit assessments could draw on a wider set of data, including credit histories, savings, pensions, investments, and transaction information, and, where permitted by regulation and consumer consent, income or payroll data. Rather than relying on narrow snapshots, open finance enables more holistic views of financial capacity, which may improve access to credit for individuals with non-traditional financial profiles while also helping lenders better assess risk.

Retirement planning tools could analyze pension accumulation across multiple workplace and personal schemes, compare projected outcomes against likely expenses inferred from transaction history, identify potential shortfalls, and recommend adjustments to contributions or investment strategies. Integrating pension data with spending patterns and other savings can materially improve the accuracy of retirement readiness assessments compared with using either data source in isolation.

Insurance optimization services could review policies held across different providers, identify gaps in coverage, flag overlapping or redundant policies, and suggest adjustments based on a more complete understanding of an individual’s financial situation. In FCA-led TechSprints and digital sandbox initiatives, participants have highlighted financial resilience use cases, including AI-driven alerts and guidance designed to help users manage cash flow, budgeting, or debt during financial shocks or changes in circumstances.

For small and medium-sized enterprises, open finance offers particular potential value. Relevant datasets could extend beyond transaction accounts to include accounting data, cash-flow forecasts, and operational records, and in some jurisdictions may expand to tax information. Access to this broader financial picture could enable services that help businesses manage liquidity, optimize working capital, access financing, and navigate financial challenges with more timely and informed guidance.

Brazil: The Leading Implementation

While Europe and the UK develop regulatory frameworks, Brazil has moved most aggressively to implement comprehensive open finance. The regulatory framework introduced in 2021 extends beyond banking to include credit, insurance, investments, and pensions.

Brazil’s approach integrated open finance with Pix, the country’s instant payment system, creating a cohesive ecosystem for both data sharing and payment initiation. The results have been impressive. Within three years of launch, Pix reached more than 160 million users and processes more monthly transactions than credit and debit cards combined. The integration demonstrates how central bank leadership, mandatory participation for large institutions, and technical standardization can rapidly transform financial services infrastructure.

The Brazilian model offers lessons for other jurisdictions. It shows that broad scope from the beginning, rather than incrementally expanding from banking to broader finance, can be viable. It demonstrates the value of tight integration between data sharing and payment infrastructure. And it illustrates how emerging markets can potentially leapfrog established markets by implementing comprehensive frameworks rather than gradually evolving from narrower starting points.

Technical and Infrastructure Challenges

Implementing open finance presents significantly greater technical complexity than open banking. Payment account data follows relatively standardized structures, transactions have dates, amounts, descriptions, counterparties. But pensions, investments, insurance, and other financial products involve far more varied data models.

Pension data encompasses contributions, employer matches, investment allocations, projected benefits, vesting schedules, and transfer values. Investment portfolios include holdings across various asset classes, valuations that change continuously, performance metrics, dividend and interest income, and tax treatment that varies by account type. Insurance policies involve coverage amounts, terms, exclusions, premium schedules, claims history, and renewal dates. Each product type requires different data structures and standards.

Establishing common API standards across these diverse products represents substantial work. Open finance requires data that is available, portable, and standardized across sectors, with clear provenance and traceability to build trust and support accountable data use. The standardization challenge is compounded by the fact that many financial services providers, particularly in insurance and pensions, have less technical infrastructure maturity than retail banks.

The infrastructure requirements extend beyond APIs themselves. Cloud infrastructure, digital identity and verification systems, and AI-supported analysis become increasingly important as data volume and complexity grow. For services to deliver meaningful insights from comprehensive financial data, they need substantial processing capabilities and sophisticated analytics.

Data Privacy and Control Considerations

Open finance dramatically increases the volume and sensitivity of data subject to potential sharing. While open banking involves transaction histories that reveal spending patterns and income, open finance adds wealth accumulation, insurance coverage, investment strategies, and long-term financial plans, information many people consider even more private.

This raises important questions about consent granularity and management. Should you be able to share pension data with one service, investment data with another, and insurance data with a third? Or does the value of open finance depend on comprehensive data sharing that enables holistic analysis? How do you maintain meaningful control when authorizations span dozens of data sources across multiple financial services sectors?

Participants in regulatory consultations highlighted secure, reusable digital identities and consent dashboards as foundational elements. The vision is centralized interfaces where you can see all data-sharing authorizations across banking, pensions, investments, and insurance, with unified controls for granting, managing, and revoking access. But building such infrastructure and ensuring it works seamlessly across diverse providers represents a significant coordination challenge.

The purpose limitation principles that apply in open banking become even more important in open finance. When services can access comprehensive financial pictures, the potential for secondary uses, data analytics, marketing, credit scoring, actuarial modeling, expands substantially. Clear rules and effective enforcement ensuring data is used only for explicitly authorized purposes become critical to maintaining trust.

The Platform Question

Open finance raises fundamental questions about market structure and competition. If comprehensive financial data becomes accessible through standardized APIs, does this enable the emergence of dominant platform businesses that aggregate all financial services and become primary customer relationships?

This platform dynamic could benefit consumers through convenience and comprehensive service, but it also risks recreating concentration and lock-in that open banking aimed to address. If a few large platforms become the primary interfaces through which people manage all financial services, those platforms gain enormous power and data advantages that could be difficult to challenge.

Regulatory frameworks attempt to address this through measures like data portability (ensuring you can move to alternative platforms) and interoperability requirements (preventing platforms from creating closed ecosystems). But the inherent economics of platforms, where value increases with scale and network effects, creates gravitational pull toward concentration.

Banks themselves are contemplating platform strategies, moving from pure providers of account data to active orchestrators of financial information. For retail clients, this means single dashboards combining transaction histories, savings, insurance, and transparent pension views. For commercial clients, platforms embedding accounting, tax, invoicing, and payments in unified interfaces. Whether incumbent banks or new entrants dominate the platform layer remains an open question that will shape competition dynamics for years.

Timeline and Realistic Expectations

Despite ambitious visions, open finance implementation will take years. The regulatory frameworks are still being developed. FiDA won’t be fully operational before late 2026 or early 2027, and that represents the regulatory adoption, actual implementation by financial institutions and development of services built on open finance will require additional time.

Technical standards must be developed for each product category. Data holders must invest in building APIs and ensuring data quality. Service providers must develop offerings that demonstrate value. Consumers must become comfortable with the expanded scope of data sharing. Each of these elements represents multi-year processes.

The phased rollout will likely prioritize certain product categories. Investments and savings might precede pensions given simpler data structures. Consumer insurance might precede commercial insurance given different complexity levels. The sequencing will depend on regulatory priorities, industry readiness, and consumer demand.

Realistic expectations suggest that basic open finance services, dashboards aggregating banking and investment data, perhaps including simpler insurance products, might become available in leading jurisdictions by 2026-2027. More sophisticated services leveraging comprehensive data across all financial products, with AI-supported analysis and personalized recommendations, likely won’t achieve maturity until the end of the decade.

Preparing for an Open Finance Future

For consumers, open finance represents a significant expansion of both opportunity and complexity. The potential benefits, better financial decisions based on complete information, services tailored to holistic needs, easier comparison and switching across all financial products, are compelling. But realizing these benefits requires active engagement with data sharing across an expanded range of financial services.

Developing literacy around open finance concepts, understanding what data different financial institutions hold about you, and thinking about which services might genuinely improve your financial life prepares you to engage effectively when open finance becomes operational. The consent and control mechanisms you learn managing open banking authorizations will translate to open finance, but the scope and complexity will be greater.

For financial services providers, open finance represents both competitive threat and opportunity. Institutions that position themselves as aggregators and orchestrators of comprehensive financial data could capture primary customer relationships. Those that provide high-quality APIs and embrace ecosystem participation could find new distribution channels and partnership opportunities. Providers that resist or lag in implementation risk disintermediation as customers increasingly access services through platforms rather than direct institutional relationships.

The transition from open banking to open finance isn’t merely incremental expansion. It represents a fundamental reconception of financial services architecture where data sharing extends across the entire financial landscape, enabling holistic services impossible in fragmented environments. The regulatory frameworks being developed, the technical infrastructure being built, and the business models being explored will shape financial services for decades.

Open finance promises to deliver on the broader vision that open banking began: giving consumers control over their financial data, enabling that data to work for them across all financial products and decisions, fostering competition and innovation, and ultimately improving financial outcomes through better information and tools. The path from current open banking to comprehensive open finance is long and complex, but the direction is clear and the momentum is building across jurisdictions worldwide.

This topic is part of the broader banking system. For a complete explanation of accounts, transfers, fees, and consumer protections, see our Banking & Cash Management guide.