Banking – Open Banking Drives Fintech Collaboration

Open Banking in 2025: Fintechs and Banks Redefine Finance

Open banking, enabling banks to share customer data with third-party providers (TPPs) via APIs, is reshaping the banking sector in 2025. By spurring fintech innovation, it’s delivering personalized financial services and intensifying competition.

What’s New?
On June 16, 2025, Australia’s Consumer Data Right (CDR) expanded open banking to include non-bank lenders, boosting access to tailored loans, per the Australian Financial Review. In Europe, the European Banking Authority reported a 25% rise in open banking transactions in Q1 2025, driven by PSD2 updates, as noted on June 17 by Finextra.

Why It Matters:
“Open banking empowers consumers, but data security is non-negotiable,” says fintech consultant Liam Chen. While apps like budgeting tools thrive, a 2024 FCA study flags 15% of TPPs failing cybersecurity standards, risking breaches. Smaller banks also face high compliance costs.

Looking Ahead:
Banks are leveraging AI to analyze shared data for customized offerings. Global regulators, including the Reserve Bank of India, are aligning rules to scale open banking. Enhanced encryption and consumer education will be critical to sustain trust.

Sources:

• Australian Financial Review, June 16, 2025.

• Finextra, June 17, 2025.

• Financial Conduct Authority, 2024.

• European Banking Authority, 2024.