Despite popular narrative, the U.S. open banking movement was not initiated by democrats or the Biden administration. In fact, it was President Trump who first laid the groundwork for this innovative movement by introducing common-sense rules-of-the-road for open banking in 2018.
President Trump’s commitment to open banking was evident in his Treasury Department’s report, “A Financial System That Creates Economic Opportunities: Nonbank Financials, Fintech, and Innovation.” In this report, the President called for a “sustained commitment to the principle that consumers should be able to freely access and use their financial account and transaction data.” He also made bold recommendations to bolster open banking under Section 1033, including affirming a consumer’s right to freely access and use their financial data, extending this right to authorized fintech providers, and facilitating similar access for accounts outside of Section 1033.
In October 2020, just days before the presidential election, President Trump’s team published detailed plans for open banking through an advance notice of proposed rulemaking under Section 1033. This move established the formal foundation for American open banking and paved the way for the creation of a vibrant fintech ecosystem.
Today, the United States leads globally in fintech innovation, with over 10,000 fintech companies operating in the country. U.S. fintechs attract approximately 46% of global fintech investment, with projections showing an increase to 62% by 2030. Fintech products have also reached mass adoption in the United States, with the proportion of U.S. consumers using fintechs growing from 58% in 2020 to 80% or more today.
Open banking is creating massive new revenue opportunities for traditional financial institutions through new open banking-powered offerings like pay-by-bank and cash flow underwriting. It is also becoming an essential safeguard against debanking, as competition and access created by open banking make it more difficult for banks to deny access to customers based on their financial behavior.
Following the directive of President Trump in his first term, the CFPB implemented a comprehensive Section 1033 open banking framework in 2024 as required by Congress. This framework allows consumers to freely share their banking data with other financial services providers at no cost, opening up the U.S. financial services market to new innovators and competitors and combating inflation by driving down consumer costs through competition.
However, this is just the beginning. The new Trump administration has the opportunity to build upon the open banking foundation that it set the first time around. In January 2025, President Trump issued an executive order, “Strengthening American Leadership in Digital Financial Technology,” which provides a clear blueprint for how America can cement its global leadership in financial services innovation through open banking.
The executive order outlines several key objectives, including protecting and promoting fair and open access to banking services for all law-abiding individual citizens and private-sector entities, providing regulatory clarity and certainty built on technology-neutral regulations, and ensuring transparent decision making. These objectives are essential to supporting a vibrant and inclusive digital economy and innovation.
To build upon President Trump’s open banking foundation and realize its potential to usher in a more competitive and prosperous financial marketplace, the administration should consider several key aims. First, it should streamline the current Section 1033 framework to eliminate unnecessary compliance burdens while maintaining consumer protections. Second, it should expand productive data utilization by permitting de-identified or pseudonymized open banking data to be used for new product development and research. Third, it should prohibit data access fees and ensure that banks cannot charge for providing customers’ financial data through open banking channels.
The administration should also prevent debanking by creating explicit protections ensuring that banking services and access to open banking data cannot be denied based on political affiliation or legitimate business activities. By taking these steps, the administration can ensure that America remains the undisputed global leader in financial services innovation for decades to come.
Expanding open banking will unlock billions in fintech innovation, driving significant growth in bank and financial technology stocks, and bolstering the broader market as investors recognize America’s strengthening position in the global financial technology race. The resulting market expansion will benefit not just Wall Street investors but everyday Americans with retirement accounts invested in America’s financial future.
Key Points
- U.S. open banking movement was initiated by President Trump in 2018.
- President Trump’s commitment to open banking led to the creation of a vibrant fintech ecosystem in the U.S.
- U.S. leads globally in fintech innovation, with over 10,000 fintech companies operating in the country.
- Open banking creates massive new revenue opportunities for traditional financial institutions.
- The CFPB implemented a comprehensive Section 1033 open banking framework in 2024 as required by Congress.
- The Trump administration has the opportunity to build upon the open banking foundation set by President Trump’s first administration.
Benefits of Open Banking
- Unlock billions in fintech innovation, driving significant growth in bank and financial technology stocks.
- Support a vibrant and inclusive digital economy and innovation.
- Combat inflation by driving down consumer costs through competition.
- Prevent debanking by creating explicit protections ensuring that banking services and access to open banking data cannot be denied based on political affiliation or legitimate business activities.
- Provide regulatory clarity and certainty built on technology-neutral regulations.
Challenges and Opportunities
| Challenges | Opportunities |
|---|---|
| Eliminating unnecessary compliance burdens | Streamlining the current Section 1033 framework to ensure consumer protections. |
| Expanding productive data utilization | Permitting de-identified or pseudonymized open banking data to be used for new product development and research. |
| Prohibiting data access fees | Ensuring that banks cannot charge for providing customers’ financial data through open banking channels. |
| Preventing debanking | Creating explicit protections ensuring that banking services and access to open banking data cannot be denied based on political affiliation or legitimate business activities. |
Conclusion
President Trump’s commitment to open banking has led to a vibrant fintech ecosystem in the U.S., with over 10,000 fintech companies operating in the country. The Trump administration has the opportunity to build upon this foundation and cement America’s leadership in financial services innovation for decades to come. By streamlining the current Section 1033 framework, expanding productive data utilization, prohibiting data access fees, and preventing debanking, the administration can unlock billions in fintech innovation and drive significant growth in bank and financial technology stocks.
The resulting market expansion will benefit not just Wall Street investors but everyday Americans with retirement accounts invested in America’s financial future.