In addition to our work on the 1033 webinar and white paper, IBAT’s Christopher Williston appeared on the popular “Banking with Interest” podcast last week to discuss the rule. Appearing with host Rob Blackwell and Kate Berry, a reporter from American Banker, the three discussed the overall impact of the rule.
In the course of the episode, Williston argued that:
- The $850 million asset threshold for exemption from the rule was too low, but also serves an important acknowledgement from the CFPB of the operational challenges that the rule presents, especially to the smallest of financial institutions.
- Market demands will drive “open banking” to every financial institution over time, requiring that we, as a nation, fully understand the benefits and threats posed by this brave new world of financial services we’re creating.
- Big banks have the most to lose from the open banking rule, not only because they’re the first to implement it, but because their relationships with customers are the most commoditized and transactional. “This,” Williston said, “makes them most likely to be threatened by fintech companies offering promotional rates and other incentives for big bank customers to move.”
- 1033 exacerbates concerns raised by banks that do not enjoy the implicit government guarantee of all depositors because, in the moment of a crisis, it will be easier than ever for consumers to move their money and their financial data to a new bank.
The episode is available to listen to online or wherever you get your podcasts.
