Banking APIs and Pumpkin Pies🎃

Hello & Happy Thanksgiving! 

While folks in the US are knee-deep in pumpkin spice, lawmakers in the country are jumping headfirst into enabling an open banking policy. This move would require incumbent banks to allow for data sharing via APIs. 

And with the US being a major economic powerhouse, it's no wonder that decision-makers across the globe are paying close attention. 

What you need to know right now: 

America embraces Open Banking (FT.com) 

The US is opening its doors to open banking, and proponents and opponents alike are watching eagerly 👀 

• A new rule introduced by the CFPB is setting the stage for major open banking development. 
• Under the new rule, US consumers will have more control and easier access to their data. Banks, meanwhile, will be required to allow data sharing via APIs with third-party users – ensuring more secure data collection methods than screen-scraping. 
• This development comes as other countries have made their own major moves into open banking – UK, EU countries and Australia, most notably. 
• Still, the road to adaptation has been rocky, leaving these countries paying close attention to how an open banking system will play out in a market as influential as that of the US. 
• So far, lingering concerns remain regarding what's in it for incumbent banks and how the new rule will affect smaller banks, which may not be able to afford the technological burden of implementing APIs. 

Why does this matter? 

Data security and access are becoming hotter topics in the financial and consumer worlds alike. On top of that, as the fintech sector continues to grow, the increased competition is crucial for a healthy global economy. 

Open banking can allow for better financial inclusion, transparency, economic growth, and product diversity. 

In short, it's a game-changer from every angle. 

A while back, for example, we wrote about how open banking in payroll can streamline the verification process for financial services – tenant screening, mortgage lending, and other processes. 

Read all about it here. 

What else to read: 

'Long overdue': Frustrated tech leaders call for progress on open banking to increase competition (Financial Post) 

As the European Union, the UK, and the US continue to move forward with their open banking initiatives, Canada remains behind... and fintech leaders are not having it. 

• With the UK, the EU, and the US all in different stages of the open banking revolution, fintech leaders in Canada are pushing for the same actions. 
• Dozens of tech leaders sent an open letter to Finance Minister Chrystia Freeland, arguing the importance of enabling open banking in the Canadian economy. 
• With so many Canadians already using services requiring sharing financial data, one primary concern is that without proper open banking policies, their information is being put at risk via insecure methods of data collection (screen scraping, for example). 
• "Every single day that we delay a modern, secure financial system, we are in effect putting a tax on Canadian businesses, and Canadians themselves, who are paying more for an antiquated system," says Nicholas Schiavo, director of federal affairs at the Council of Canadian Innovators. 
• This letter follows the October campaign that pressured the government to commit to its promise in 2021 to implement an open banking system at the start of 2023. 

Apple Pay rolls out new open banking feature for UK customers (FinTech Futures) 

Big tech is tapping into the open banking, with Apple Pay's new feature speaking volumes to this. 

• The new feature allows UK consumers to access account info like debit card balance and transaction history while they're making a purchase.   
• This development will allow consumers to make more informed financial decisions when they make purchases. 
• "By enabling users to conveniently access their most useful account information within Wallet and at the time of their purchase, they can make informed financial decisions and better understand and manage their spend," says Jennifer Bailey, vice president of Apple Pay and Apple Wallet. 
• Through this new feature, Apple will be working closely with major banks in the country, like Barclays and Halifax. 

Learn more about Open Banking here. 

Further reading: Open for Business: Why Payroll Providers Should Embrace Open Banking. 

Till next time,  The Papaya Global team 

We've been named a Leader in Payroll Payments for Enterprise by G2 for Fall 2023. But that's not all – we've also earned the High Performance and Best Support designation!

Curious about why so many customers choose Papaya Global? 

Click the link below to find out and see how we can empower your enterprise payroll solutions 👇

https://okt.to/09T7o3