Open finance is a framework that gives people the right to choose with whom they share their financial data. Done properly, it should enable secure and easy sharing of data, which in turn will allow companies to develop products related to insurance, alternative lending, digital banking, personal financial management, account aggregation and more. Open finance will also promote financial inclusion for all South Africans; it is something that we can all look forward to.
The Financial Services Conduct Authority (FSCA) is paving the way for the regulation of open finance in SA. In May there was a feedback session on its draft open finance consultation paper. Here is a summary of the main points affecting fintech companies and traditional financial institutions alike.