Open Banking in the EU: A Consumer Dystopia or Utopia?

Through ‘Open Banking’, enshrined in the Second Payment Services Directive (PSD2), individuals and businesses can make payment account data available beyond banks to other financial providers, who can offer them personalised products, lower prices, and innovative solutions. These other financial providers are FinTech companies that use artificial intelligence (AI) technology to offer services. A part of Open Banking data is also personal data, bringing into play the General Data Protection Regulation (GDPR). This chapter employs a doctrinal analysis to discuss how the PSD2, GDPR, and the Artificial Intelligence Act (AIA) interact in order to clarify the roles and legal responsibilities of the Open Banking actors, which is thus far not explored in academic literature, as the risks of uncontrolled AI in finance can be detrimental to financial stability and consumers’ trust on the financial sector which is one of the foundations of its well-functioning.