Regulators must be wary of the risks posed by banks providing account access to unregulated fintechs as open banking models take shape, an influential group of central banks has warned.
The Bank for International Settlements’ (BIS) Banking Supervision Committee said on Tuesday that risks arise in some jurisdictions where open banking is developing and where third-party providers (TPPs) do not require authorisation to receive customers’ banking data.
A report published by the committee said the risks are exacerbated when there are no contractual agreements between banks and TPPs, or between banks and other entities to which providers may pass data.
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