The Consumer Financial Protection Bureau (CFPB) has officially recognised Financial Data Exchange (FDX) as a standard-setting body under its Personal Financial Data Rights rule.
This approval enables FDX to establish Open Banking standards in the US. Open Banking technology has been in use in the US for over 20 years without regulation, primarily in the form of screen scraping, until now.
FDX is a standard-setting organisation in the US and Canada with over 200 members, including financial entities, data providers, aggregators and consumer groups. Its mission is to create and maintain secure, interoperable standards for accessing financial records.
In September 2024, FDX sought recognition from the CFPB under the regulator’s new Personal Financial Data Rights rule.
Following its approval, FDX must adhere to a ban on “pay-to-play” practices and avoid conflicts of interest, ensuring its standards are developed without favouritism or financial incentives that give certain market players unfair advantages.
It is also required to report on market adoption of its standards and maintain a public resource where companies can disclose their use of or certification to these standards.
Additionally, FDX must make its standards freely accessible to the public and ensure transparency in its development and issuance processes, providing equal access to members and non-members alike.
This alignment of market-driven initiatives and regulatory progress is expected to boost the US standing in the global Open Banking race, a space where the UK has been consolidating a leadership position – though Australia and the Nordics are also good contenders.
In December, Eyal Sivan, North American General Manager for Ozone API, discussed the impact of this shift, saying: “By increasingly moving towards standardisation via FDX…the US is poised to become a true global leader”.
