Global fintech and funding innovation ecosystem

“Open banking” May Cause Deposit Outflows, Warns U.S. Regulator

FP | Hannah Lang  | Apr 19, 2023

Unsplash Tech Daily digital money - "Open banking" May Cause Deposit Outflows, Warns U.S. Regulator

Image: Unsplash/Tech Daily

The evolution of “open banking” in the U.S. could impact how regulators supervise banks, as seamless account portability between financial institutions could lead to increased deposit outflows, a top banking regulator said on Wednesday.

See:  FinTech Executives Disappointed with Budget 2023’s Lack of Open Banking Update, Raising Doubts on Delivery Timeline

Comptroller of the Currency, COO, Michael Hsu:

While data portability will likely be empowering for consumers, it could also increase the liquidity risk of retail deposits for banks.  While such rules could ultimately increase the ‘stickiness’ of retail deposits and lower liquidity risks by encouraging banks to take steps to retain customers, the transition to such a state “warrants careful monitoring.  Already, there is a sense that online and mobile banking may have facilitated unusually large and rapid outflows of wholesale deposits at Silicon Valley Bank and Signature Bank last month.  While it would be an “overstatement” to attribute the bank run solely to social media and the ease of mobile banking, regulators would be remiss to ignore the impact that both have had on the banking industry.  We, bank regulators, need to pay closer attention to how changes in technology and associated practices may impact risks in banking.

Continue to the full article --> here

NCFA Jan 2018 resize - "Open banking" May Cause Deposit Outflows, Warns U.S. RegulatorThe National Crowdfunding & Fintech Association (NCFA Canada) is a financial innovation ecosystem that provides education, market intelligence, industry stewardship, networking and funding opportunities and services to thousands of community members and works closely with industry, government, partners and affiliates to create a vibrant and innovative fintech and funding industry in Canada. Decentralized and distributed, NCFA is engaged with global stakeholders and helps incubate projects and investment in fintech, alternative finance, crowdfunding, peer-to-peer finance, payments, digital assets and tokens, blockchain, cryptocurrency, regtech, and insurtech sectors. Join Canada's Fintech & Funding Community today FREE! Or become a contributing member and get perks. For more information, please visit:

Latest news - "Open banking" May Cause Deposit Outflows, Warns U.S. RegulatorFF Logo 400 v3 - "Open banking" May Cause Deposit Outflows, Warns U.S. Regulatorcommunity social impact - "Open banking" May Cause Deposit Outflows, Warns U.S. Regulator

Support NCFA by Following us on Twitter!

NCFA Sign up for our newsletter - "Open banking" May Cause Deposit Outflows, Warns U.S. Regulator


Leave a Reply

Your email address will not be published. Required fields are marked *

18 + 4 =