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Consumers have become more aware of the security risks their data is exposed to, resulting in tougher privacy regulations that increase business costs and slow innovation. But, with new moves toward open banking on the horizon, there is a better, more secure way to share your data — without the concern that banks will use it for marketing purposes.

Recently, the Consumer Financial Protection Bureau (CFPB) unveiled its plans to activate a dormant authority laid out more than a decade ago in the Dodd-Frank Act. Based on Director Rohit Chopra’s comments, the industry’s assumption that regulators won’t mandate banks to share customer data may not prove true, which could transform the banking industry for good.

Are we entering the open banking era?

On paper, open banking is simple: Create a network where consumers, banks and non-bank financial institutions can securely exchange pertinent data for creating transparency, reducing fraud and improving service delivery. In other words, provide third-party service providers with open access to consumer banking, transaction and other financial data from banks and non-bank financial institutions through the use of application programming interfaces, or APIs. However, with regulatory bodies racing to stay ahead of technology-based privacy concerns over the past decade, many thought open banking was a long way off.

At October’s Money 20/20 conference, Chopra unveiled a process for exercising the CFPB’s authority under Section 1033 of the Dodd-Frank Consumer Financial Protection Act that could lay the foundation for open banking. While specifics have yet to be defined, the rule would obligate financial institutions to share data with consumers upon their request. At the least, this would bolster industry competition by making it easier for consumers to pack up and switch banks for reasons like bad service. It would also take power away from service providers that try to act as gatekeepers, strengthening the competitive advantage of those who provide the best rates, products and customer service.

So, does this mean we’re entering the open banking era? For certain, it means we’re moving one step closer. Even if the CFPB doesn’t mandate data sharing, it will most likely establish standards and guidelines on how to do it. Of course, these processes take time. The CFPB plans to publish a report in the first quarter of 2023 following a public comment period. It will propose rules late next year, and Chopra said that they aim to finalize a rule and begin implementing it sometime in 2024. In other words, official change will not happen overnight, but that doesn’t mean financial institutions can afford to sit and wait.

Related: How Open Banking Can Benefit Small Businesses

It’s already time to leverage consumer data

Supported by droves of startups, certain financial institutions have already begun building the foundation for open banking by utilizing technology like API-based collaboration. Now, consumers can use a non-bank financial app, like a budgeting tool, and connect it to their spending, saving and credit card accounts to reveal insights about their transactions. The banks that support this type of integration recognize it as an opportunity to improve the customer experience and even provide new services. Still, not everyone is on board just yet.

Faced with open banking regulations, financial institutions always have the option to simply comply and do nothing more, like those who have yet to get involved in the voluntary Financial Data Exchange (FDX). It’s a valid choice, but it means staying unaware of what’s happening with customers everywhere else they bank, leading to ecosystem ignorance.

There are other ways to view a financial institution’s role in open banking. Finding ways to share consumer data and leverage other financial institutions’ information will put a business in a far better position for developing competitive offerings, especially as the CFPB moves forward with its plans. We’ll examine each of these different roles next.

Since the industry has already been moving toward standardization independent of regulation, like through the FDX, it’s unlikely any standards established by the CFPB will look dramatically different from the existing specifications. With that in mind, financial institutions have no excuse for not moving forward and getting involved in the innovation that’s already happening, which holds vast opportunities ahead of regulations that may catch some players off guard and vulnerable to increased competition.

Related: How Tech is Shaping the Future of Finance

Everyone can benefit from open banking

The ability to connect financial institutions (FI) and third parties safely and efficiently with well-proven mechanisms is an exciting opportunity, not just for the companies that comprise the ecosystem but for individual and corporate customers. By consuming data instead of just providing it, banks can build an accurate 360-degree view of their customers, helping them recommend the right products, improve service experiences and support users’ financial goals. It allows banks to be more intelligent, creating ecosystem intelligence.

It’s not all about sharing data, either. Sometimes it’s about sharing capabilities through Embedded Finance or Banking as a Service (BaaS) solutions. For instance, banks can allow third parties to initiate transactions from their front end, such as inside an accounting, invoicing or ride-sharing app. In turn, the third-party provider creates a more convenient customer experience while the bank acquires a new client with a substantially lower, if not free, acquisition cost. I call this ecosystem infrastructure.

Taking this a step further and putting everything together, banks can share and consume information from other FIs, fintech and third parties, creating opportunities for business models such as marketplaces and super apps. I like to refer to this ecosystem orchestration, which allows banks to become a one-stop shop for financial services.

Financial institutions that move in this direction while adhering to the emerging open banking standards will be ready to integrate with virtually the entire market while simultaneously solving for immediate use cases. Doing so is a win/win with endless benefits yet to be realized for consumers, corporate clients and financial institutions.