Open Banking and Financial Innovation: Opportunities and Challenges in Digital Finance
DOI:
https://doi.org/10.54518/fid.2.1.2024.1249Keywords:
Open Banking, Financial Innovation, Digital Finance, Fintech, Financial Ecosystems, Digital Financial ServicesAbstract
Open banking has emerged as a significant financial innovation that enables secure data sharing between financial institutions and authorized third-party providers, creating new opportunities for digital finance development. This study examines the role of open banking in promoting financial innovation through a qualitative Systematic Literature Review (SLR) guided by the PRISMA 2020 framework. Relevant studies published between 2019 and 2023 were collected from major academic databases and analyzed using thematic synthesis. The findings indicate that open banking enhances financial innovation by facilitating customer data sharing, supporting fintech collaboration, improving service personalization, and strengthening financial ecosystem development. The review further reveals that technological advancement, customer demand, regulatory support, and digital transformation initiatives are important drivers of open banking adoption. However, cybersecurity risks, data privacy concerns, regulatory challenges, and digital trust issues remain significant obstacles. The study concludes that open banking represents a transformative mechanism that supports innovation, competition, and customer empowerment while shaping the future development of digital finance.
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