Open Finance - Hero

Open Finance

    CGAP estimates that two billion low-income customers in low- and middle-income countries are digitally included, but a significant portion remain financially excluded or underserved. Open finance, with its potential to revolutionize the financial services sector, can be a substantial catalyst for financial inclusion. It is a financial innovation that facilitates permissioned access to, and use of, customer data held by financial institutions to provide new and enhanced services and develop innovative business models.  

    Open finance promotes innovation by enabling new products, services, and business models. It can support competition, empower customers, and simplify financial services, benefiting customers and service providers. 

    However, it's crucial to remember that these benefits can bring new and enhanced risks. With the increasing adoption of open finance in emerging markets and the increase of digital data trails, it is essential to understand how to maximize the potential benefits and assess the associated risks.  

    CGAP is actively working to expand available research and resources on open finance. 

    Featured Content

    A boy looks at his smartphone Photo credit: Tony Karumba via Communication for Development Ltd.
    Blog

    Open Finance Can Reduce Financial Inclusion Gaps: Here’s How

    Open finance can be a transformational enabler to unleash the power of data to increase financial inclusion. Data-driven strategies and open finance ecosystems can revolutionize access to financial services, especially for underserved communities.
    two women with headscarves sit on the curb outside a shop while looking down at their mobile phones Photo by Arete
    Publication

    The Building Blocks Supporting Open Finance

    This working paper introduces the concept of an inclusive data ecosystem as one where low-income people’s data trails are used to improve their financial inclusion. The paper highlights open finance as a catalyst for inclusive data ecosystems and identifies key enabling layers that drive the success of open finance and, by extension, an inclusive data ecosystem.
    An older woman holds a mobile phone while smiling at something off camera Photo by C4D 2021
    Publication

    Open Finance Self-Assessment Tool and Development Roadmap

    This technical guide introduces the open finance self-assessment tool and development roadmap. It provides practical tools for policymakers to use to decide whether to implement an open finance regime to advance financial inclusion and outline a development roadmap to guide the implementation process.

    Additional Resources

    Blog

    Trust and Awareness Will Be Key for Open Finance Adoption in India

    India is pioneering open finance in developing economies, with 64 million accounts linked through its Account Aggregator ecosystem as of March 2024. As India continues to scale the ecosystem, early insights could help shape AA's future direction.
    Events

    Open Finance: Lessons from Brazil

    This webinar features insights from CGAP research, as well as a panel discussion with experts from the Brazilian open finance ecosystem.
    Blog

    Success in Open Finance Requires Trust – Lessons from Brazil

    Brazil's rapid expansion of open finance shows its potential to transform financial services, and recent CGAP research offers valuable insights into Brazil, as well as other markets interested in implementing open finance.
    Blog

    To Reach its Inclusive Potential, Open Finance Needs Data Protection

    Open finance gives consumers control over their personal financial data, leading to more suitable and better-targeted financial services. But this ability to move entire financial histories both empowers consumers and poses risks.
    Events

    Combining Open Finance and Data Protection for Low-Income Consumers

    In this webinar, the authors of a new CGAP Technical Note on open finance discussed how to address data protection concerns in an open finance world so that wary, low-income consumers in Emerging Markets and Developing Economies (EMDEs) can take advantage of what open finance has to offer.
    Blog

    Can Open Banking Support Financial Inclusion in Nigeria or Elsewhere?

    Open banking initiatives must be well designed to deliver the benefits they promise consumers and financial service providers - Nigeria’s framework offers a look at both the opportunities and potential pitfalls of implementing such a scheme. 
    Events

    Spotlight on Regulators: Open Banking and Financial Inclusion

    Building on CGAP’s paper, Open Banking: How To Design for Financial Inclusion, this webinar featured regulators in Latin America and Africa who are implementing or planning to implement open banking regimes in emerging markets. A particular focus was on understanding how financial inclusion is affecting the regime choices they are making, as well as how challenges relating to governance and data protection are being dealt with.

    Blog

    Open Banking: 7 Ways Data-Sharing Can Advance Financial Inclusion

    When banks and other financial institutions responsibly exchange customer data with other providers, the result is better products for low-income customers.
    Blog

    Open Data and the Future of Banking

    Although growing numbers of low-income people are entering the formal financial system, many are not yet leveraging its full value. Emerging regimes for data sharing and payments flexibility have the potential to bypass traditional financial sector development and give poor customers better products and more choices.