The ongoing conflict between fintech firms and banks revolves around open banking, a policy aimed at enabling consumers to control their financial data more effectively. Advocates from fintech highlight its consumer-friendly aspects, while banks express concern over potential security risks. Following the weakening of the Consumer Financial Protection Bureau by the Trump administration, traditional banks began to charge fees for data access. This situation illustrates the shifting dynamics of power within the financial sector, as some factions of the Trump coalition support open banking under the CFPB, albeit reluctantly.
Fintech firms like Plaid championed open banking as a consumer-friendly approach to controlling data and enabling its transfer between institutions like JP Morgan and Robinhood.
One of the Trump administration's first acts was to gut the CFPB, with its open banking proposal sacrificed as collateral damage, prompting banks to charge fintech firms for data access.
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