The Battle for Financial Data Ownership
The concept of “open finance” highlights a fundamental struggle over who owns the story of a person’s financial life. Most people’s financial lives are highly fragmented.
They often manage:
- Multiple bank accounts
- Credit cards
- Investment portfolios
- Retirement savings
- Insurance policies
- Various payment applications
All this information resides in different places, making a holistic view difficult.
Open finance aims to give customers greater control over this scattered data. Traditionally, banks have been the custodians of both funds and financial data.
However, consumers now expect a higher level of transparency from their financial institutions. Open finance promotes a more transparent flow of both data and money.
In this evolving environment, trust becomes a central factor. The institutions that prioritize and earn customer trust are positioned to succeed. The debate around open finance is, at its heart, a debate about trust.
Big Tech’s Pursuit of Customer Relationships
Big Tech companies are steadily increasing their presence in the financial sector, a trend that is often described as “hiding in plain sight.” A common question is whether these technology giants intend to become banks.
However, this may not be the most relevant question. What Big Tech truly seeks is something potentially more valuable than holding deposits: the customer relationship itself.
By influencing consumer spending, borrowing decisions, and investment choices, Big Tech can exert major power over financial behavior. Banks have historically owned this customer relationship, investing heavily in marketing to stay at the forefront of their customers’ minds. Yet, many people now begin their day by interacting with Big Tech platforms.
This direct and frequent engagement positions technology companies as emerging competitors for the primary customer relationship. They may not want the regulatory burdens or traditional business models of banks, but they certainly covet the direct connection and influence over customer behavior.
Handling Control and Data Autonomy
The overarching theme in the evolving financial environment is control. People routinely give away personal data through everyday digital interactions. This includes login information, geographic location, comments, and shared images.
The question arises whether people should be worried about this data sharing. While outright worry might not be necessary, paying close attention is advised.
Institutions that successfully earn and maintain trust over the coming years are those most likely to thrive. Success in this new environment requires a careful integration of trust, technology, regulation, and customer experience. Many believe Big Tech already controls a large amount of personal data.
However, there is a growing debate about consumer autonomy over their data. This discussion spans governments and regulators globally. A future trend could see people beginning to monetize their own data.
For example, people might grant access to their behavioral patterns to specific companies in exchange for value, rather than allowing this data to be collected freely as often happens now. This potential shift could empower people to regain some control over their digital footprint.
