Babina, Tania;
Bahaj, Saleem;
Buchak, Greg;
De Marco, Filippo;
Foulis, Angus;
Gornall, Will;
Mazzola, Francesco;
(2025)
Customer data access and fintech entry: Early evidence from open banking.
Journal of Financial Economics
, 169
, Article 103950. 10.1016/j.jfineco.2024.103950.
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Abstract
Open banking (OB) empowers bank customers to share their financial transaction data with fintechs and other banks. New cross-country data shows 49 countries adopted OB policies, privacy preferences predict policy adoption, and adoption spurs fintech entry. UK microdata shows that OB enables: (i) consumers to access both financial advice and credit; (ii) SMEs to establish new lending relationships. In a calibrated model, OB universally improves welfare through entry and product improvements when used for advice. When used for credit, OB promotes entry and competition by reducing adverse selection, but higher prices for costlier or privacy-conscious consumers partially offset these benefits.
| Type: | Article |
|---|---|
| Title: | Customer data access and fintech entry: Early evidence from open banking |
| Open access status: | An open access version is available from UCL Discovery |
| DOI: | 10.1016/j.jfineco.2024.103950 |
| Publisher version: | https://doi.org/10.1016/j.jfineco.2024.103950 |
| Language: | English |
| Additional information: | Copyright © 2024 The Authors. Published by Elsevier B.V. This is an open access article under the CC BY license (http://creativecommons.org/licenses/by/4.0/). |
| Keywords: | Financial regulation; Open banking; Financial innovation; Data access; Data rights; Big data; Artificial intelligence |
| UCL classification: | UCL UCL > Provost and Vice Provost Offices > UCL BEAMS UCL > Provost and Vice Provost Offices > UCL BEAMS > Faculty of Engineering Science > UCL School of Management |
| URI: | https://discovery.ucl.ac.uk/id/eprint/10219817 |
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