Open finance has a great potential

The issue of open finance is becoming increasingly important, both globally and in Switzerland. It will play a central role for the Swiss financial centre in the future. The roundtable held on 23 December 2020 and chaired by the Head of the Department of Finance, Ueli Maurer, provided an opportunity for in-depth discussions on the topic.

Open finance is emerging as a key development in the financial sector, driven by technological progress and changing client needs. In the long term, this development should lead to significant changes, both structurally and in terms of service provision.

Based on the principle of sharing financial data via standardised and secure interfaces, open finance represents above all a paradigm shift, as it gives control back to consumers, who can choose which data can be shared and who can access it. This is achieved through innovative and easy-to-use services.

For example, individuals with accounts at several banks can, by simply tapping on their smartphones, consult all their accounts using the app provided by one of the banks or a third party. They can also make better investment decisions because they have a global view of all their investments.

The entire economy, not just the financial sector, should benefit from innovative and more efficient financial services. For example, an SME could optimise its cash management or obtain credit more easily and quickly thanks to the wealth of data available.

Private initiatives in Switzerland

Unlike in other countries, especially in the EU, there is currently no legal obligation in Switzerland for financial institutions to share client data with third-party providers via standardised interfaces. However, a number of players have launched initiatives in Switzerland, in particular to standardise technical interfaces.

However, open finance is still in its infancy and numerous challenges remain: standardisation of interfaces, defensive reflexes on the part of some established players who are reluctant to share client data with potential competitors, and reputational risks in the event of failure on the part of third-party providers.

But challenges also bring opportunities, and the industry itself sees great potential in open finance for the Swiss financial centre. This is especially true since Switzerland has a robust pool of companies active in financial technology (fintechs) and benefits from favourable framework conditions for innovation. By playing an active role in open finance, the Swiss financial centre can further strengthen its competitiveness.

The State Secretariat for International Finance is in regular contact with industry representatives on the subject and actively supports these developments. At the roundtable discussion on 23 December 2020, chaired by the Head of the Department of Finance and attended by stakeholders from the private sector, concrete ways of accelerating the development of such an ecosystem were discussed.

Open banking refers to the practice of sharing banking data via standardised and secure interfaces at the request of clients. 

Open finance is an expansion of open banking to the entire financial sector and includes not only banking data, but also data on insurance, securities investments, mortgages and pension funds.

Last modification 23.12.2020

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