Open banking has yet to deliver on its full promise Payments innovation is lagging behind consumer expectations Regulatory uncertainty creates challenges—and opportunities Fraud and scams are the biggest threats Compliance should enable innovation, not stifle it AI and data quality are critical for the future of compliance Organizations must move fast—waiting is not an option Shaping the next era of payments and open banking
With shifting regulations and increasing demand for real-time transactions in the world of open banking, financial institutions face a distinct challenge. To remain competitive, banks must adopt a fintech-like approach to innovation in payments, while FinTechs must ensure their compliance strategies evolve just as rapidly as their business models.
Our recent webinar, “Follow the Money: Payments and Open Banking Dangers, Opportunities, and Compliance” brought together industry leaders to discuss the evolving landscape of open banking, payments, and compliance. Experts Lou Smith of Stripe UK, Simon Taylor of Sardine, Steve Marshall of FinScan, and fintech industry influencer Leda Glyptis shared their insights on how financial institutions, FinTechs, and regulators can navigate the opportunities and risks in this fast-changing space. Here are the key highlights of the discussion.
Open banking has yet to deliver on its full promise
While open banking has made significant progress in some markets, it hasn’t fully realized its potential. The UK initially led the charge but has since fallen behind regions like Australia and the EU. The business model remains unclear, making it difficult for financial institutions to fully embrace open finance.
➡ Open finance needs more than just regulatory mandates—it requires clear incentives for financial institutions to participate and innovate. Without a tangible revenue model, adoption will remain sluggish.
Payments innovation is lagging behind consumer expectations
Consumers want simplicity—they don’t want to constantly switch between accounts, worry about payments failing, or struggle with financial admin. While the US has seen higher adoption of open banking-enabled payments (for example, linking bank accounts to fintech apps like Plaid), the UK and other markets still focus primarily on open checking, which offers limited value.
➡ Payments innovation must prioritize ease of use for consumers and merchants. The ability to move money, fund wallets, and complete seamless transactions is far more valuable than simply viewing aggregated financial data.
Regulatory uncertainty creates challenges—and opportunities
Regulation in open banking remains a moving target, with some jurisdictions tightening oversight while others (like the US) consider deregulation. The Consumer Financial Protection Bureau (CFPB) in the US is currently on hold, leaving open questions about who owns liability in fraud cases—a critical issue for financial institutions.
➡ Businesses shouldn’t wait for clarity; they should take a proactive approach to risk and compliance while shaping their own strategies. The lack of clear rules creates room for industry-driven standards to emerge.
Fraud and scams are the biggest threats
Financial scams are increasing in scale and sophistication, often originating from social media and other digital channels. The lack of industry-wide fraud intelligence sharing makes it easier for criminals to exploit gaps between banks, FinTechs, and payment platforms.
One promising effort is the Sonar initiative, where financial institutions collaborate with major crypto exchanges to predict and prevent fraud. By analyzing transactional behavior and device activity, they identified 42% of wire scams before they happened.
➡ The financial industry must collaborate to fight fraud more effectively. Because scammers share information freely, financial institutions need to do the same by building real-time fraud detection networks.
Compliance should enable innovation, not stifle it
Traditionally, compliance has been seen as a cost center rather than a business enabler. But forward-thinking FinTechs are embedding compliance into product design from the start—not treating it as an afterthought.
➡ Chief risk officers (CROs) must be more deeply integrated into business strategy. Compliance teams need to be involved early in product development to shape solutions that are both customer-friendly and risk-aware.
AI and data quality are critical for the future of compliance
AI holds enormous potential for improving fraud detection, streamlining compliance, and reducing false positives. However, poor data quality remains a major challenge. If the data used to train AI models is incomplete or unreliable, the results will be flawed.
➡ AI can be a game-changer, but only with high-quality data. Financial institutions need to invest in better data governance and real-time monitoring to maximize the benefits of AI-driven compliance.
Organizations must move fast—waiting is not an option
Despite regulatory uncertainty, companies that hesitate will fall behind. The financial landscape is shifting rapidly, and those who fail to adapt risk losing their competitive advantage.
➡ Now is the time to invest in compliance, fraud prevention, and payments innovation. Financial institutions and FinTechs must align their organizations around data-driven, consumer-centric strategies.
Shaping the next era of payments and open banking
The future of open finance will be shaped by those who take action now. Whether through collaboration on fraud prevention, smarter compliance approaches, or payments innovation, financial institutions must evolve beyond regulatory box-ticking and prioritize real consumer value.
Want to stay ahead in this space? Start thinking about risk and compliance as strategic enablers—rather than barriers—to innovation.
Did you miss our recent webinar, “Follow the Money: Payments and Open Banking Dangers, Opportunities, and Compliance”?