G20 Nations to Require Banks to Share Customer Data with Fintech Firms by 2027

The G20 nations have agreed to mandate that their banking institutions share customer data with licensed fintech companies by the end of 2027, as part of a global open banking standard that marks a qualitative leap in financial sector regulation.

The agreement was adopted by G20 finance ministers at their recent summit, establishing a unified Application Programming Interface (API) standard that allows consumers to grant fintech companies explicit permission to access their banking data—such as transaction details, credit scores, and spending patterns.

Europe—which spearheaded the effort with its PSD2 framework—is expected to lead implementation, while Australia, the UK, and the US intend to adapt their existing standards to align with the new framework, while India is considered the fastest to integrate into the system thanks to its well-established UPI digital system.

Privacy and data protection remain the primary hurdles to implementation, particularly concerns regarding companies misusing customer data without their knowledge—an issue that prompted lawmakers to propose the so-called right to data portability.

What Do These Terms Mean?

Open Banking: A system requiring banks to share customer data (with permission) with third-party companies via APIs—enabling consumers to use a third-party app to view all their bank accounts, compare services, and transfer options.

Application Programming Interface (API): A technical mechanism allowing two distinct applications or systems to communicate and exchange data securely—acting like a unified key that opens bank data to the app chosen by the customer.

Right to Data Portability: The consumer's right to own their data and easily transfer it to any other service—much like porting a phone number between telecom providers.