The Changing Legal Framework for Open Banking in the European Union Landscape: Evolution or Revolution?

Over the past decade, the European payments landscape has undergone significant changes, driven by fast-paced technological advancements and evolving consumer behaviours. Especially, open banking is gaining significant traction due to its potential to revolutionize the financial industry, by dismantling traditional banking monopolies over consumer data, reshaping how businesses and consumers engage, and giving rise to a new era of financial empowerment and innovation. Yet, open banking, despite its recent growth, is still at infant stage and there is a strong drive from both the industry and regulators in the ecosystem to establish a secure and robust regulatory landscape. Reflecting upon these considerations, this article critically analyses the legal implications, evolution and controversial loopholes of the EU open banking movement as experienced by the main stakeholders and shaped by the relevant regulatory initiatives, i.e. the application of PSD2 and the introduction of PSD3 and PSR proposals.