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Friday seminar - Tania Babina, (Columbia Business School), Customer Data Access and Fintech Entry: Early Evidence from Open Banking

Tania Babina, Columbia Business School

Open banking is the trend of empowering customers to share their banking data with fintechs and other banks. Tania Babina and co-authors compile a novel dataset documenting that governments in 49 countries have implemented open banking policies and 31 more are in active discussions. Following adoption, fintech venture capital investment increases by 50%, with more comprehensive policies showing larger effects. They examine the policy tradeoffs with a quantitative model of consumer data production and usage. Their calibrations show that customer-directed data sharing increases entry by improving entrant screening ability and product offerings, but harms some customers and can reduce ex-ante information production.

Dept. of Finance Friday seminars