NEW YORK — The free flow of consumer data and information would spark innovation in their industry, fintech leaders say. 

“If you had the right to move and transport your data, I think we would see a lot more innovation there,” Matt Janiga, director of regulatory and public affairs at fintech Trustly, said at Empire Fintech Conference 2024 April 10.

Banks sit on a lot of data that they say is their own, Janiga said. But he said the data doesn’t belong to the banks— they wouldn’t have it if consumers didn’t have accounts and credit cards. 

“Without this broader data access, … we have these gaps or these holes across all sorts of things,” he said, including access to health care data, banking data and access to other information that belongs to the consumer.

Data access would “boomerang” industries, including financial services and health care, back to competition, because consumers would have more information at their fingertips, he said. 

Open banking rulemaking 

While proposed open banking rules can make innovation easier for retail customers, they do not help small businesses much, Sharon Carmeli, general counsel at SMB banking platform Bluevine, said at the conference. 

“Today, small businesses are likely to be left out of the 1033 rulemaking [also know as the open banking rule], at least this first round,” Janiga said. “Banks are very protective of their data” and until the Consumer Financial Protection Bureau includes SMBs in subsequent rule-making, it will be difficult for them to access data. 

In the proposed rule published Oct. 19, 2023, CFPB said there could be additions after it receives responses from the financial services industry. 

CFPB Director Rohit Chopra said last month that the bureau will “codify what attributes standard-setting organizations must demonstrate to be recognized under the rule” to make compliance easier. 

The bureau will provide more detailed guidance before the end of the year if it is unable to identify standard-setting organizations, Chopra said in a March 14 note.