Navigating the Future of Open Banking: What Lies Ahead in 2024 and Beyond

Commerce Ventures
3 min readMay 14, 2024


The landscape of financial technology is continually evolving, with open banking at the forefront of revolutionizing how consumers and businesses interact with financial services. As we look to the second half of this year, the industry is poised on the brink of a next wave of open banking, promising to reshape the market through regulatory changes and technological advancements.

The Current State of Open Banking

Over the past decade, open banking has facilitated a surge in FinTech applications, reshaping the financial services industry. Despite its growth, the market has been controlled by a few key players, with access to data not being universal or standardized. Today, open banking is defined by controlled, permissioned access to financial data through multiple layers. At the heart is the aggregation layer, where players such as MX and Plaid have underpinned the emergence of an entire generation of financial applications by easily leveraging and connecting relevant 3rd party data.

Shifting Dynamics in the Industry

Regulatory and market changes are driving the industry into a new era. Proposed policy changes, notably the CFPB’s proposed Rule 1033, aim to standardize eligibility, access, and pricing, potentially opening the market further. These changes underline the necessity for digital journeys that enhance customer engagement throughout the lifecycle of financial services.

Challenges and Opportunities Ahead

The shift in open banking presents both challenges and opportunities. At the core, these are shaped by the continued democratization of ecosystem access and lowering pricing across the value chain. There are three implications for banks and FinTechs:

  1. Reduced PFI lock-in: Banks and FinTechs can steal your accounts and lower customer engagement w/ lower switching costs. At the same time, there is an opportunity to win new accounts and drive cross-sell through differentiated products and tech-enabled experiences.
  2. Need for tighter focus: Opportunity to steal market share by outcompeting on price and segment/ vertical experiences.
  3. Race for embedded mass market distribution: Need to implement new business models that rethink the traditional relationship with the customer and leverage lower costs, with more scalable infrastructure.

These implications will change the “playbook” for banks and FinTechs. These players are inherently not the same and will require different strategies. However, at the core, it will require new capabilities that support greater personalization, dramatically higher automation, and a reimagined value proposition.

Looking Forward: The “Fourth Wave” of Open Banking

As we look forward, the industry is gearing up for a new phase of open banking. This phase is expected to drive standardized data connectivity on a significant scale, promoting greater choice, reduced pricing, and enhanced experiences.

As we progress further into 2024 and beyond, stakeholders across the financial spectrum will need to adapt to these changes, ensuring they are well-positioned to capitalize on new opportunities and navigate the challenges of an increasingly open ecosystem, with lower barriers to entry, changing consumer expectations, and new data-driven experiences.



Commerce Ventures

Early-stage venture capital firm investing in technology innovators in the retail and financial services eco-systems.