Introduction

This chapter provides an overview of the approaches to Open Banking (OB), specifically as these approaches impact financial technology (FinTech). Amid the rise of FinTech, new players such as FinTech startups have emerged, shaping the landscape of the modern financial market by, for example, providing payment services and bringing benefits to consumers and the market. Though startups have faced market-entry barriers, open banking (OB) regulations or policies have been introduced across jurisdictions to mitigate these barriers by requiring, for instance, banks to open their data pools for use by those FinTech businesses. In addition, these OB regulations were implemented to foster financial innovation and competition. Both the payment services directive (PSD2) in the EU and the UK’s OB policy exemplify the compulsory OB regulations where banks are required to open their data pools. In Taiwan, by contrast, banks are given an option to open their data pools, employing the voluntary approach and allowing them to lead the OB initiative. We compare these two OB regulatory approaches. Though findings are generalized, this book uses the institutional design perspective to address the limitations of traditional sector regulators with respect to the rise of FinTech. We propose a solution that focuses on re-crafting the financial regulator’s structure, thereby promoting financial innovation, competition, and inclusion in the era of FinTech.