By Lisa Arthur
DOGE recently pulled the plug on the CFPB, just as a long-awaited 1033 ruling was implemented and set to reshape the landscape for U.S. credit unions. With the CFPB’s future uncertain, many are left wondering what’s next for financial regulation.
Despite this uncertainty, it’s more critical than ever for credit unions to continue developing and implementing open finance. The industry’s direction is clear—open finance is the future, and those who embrace it will be best positioned for success.
We've heard credit union leaders’ apprehensions to open finance —fear of membership loss, privacy risks, the cost of overhauling legacy systems, limited resources, and being outpaced by competition from fintechs and more tech-savvy players. While the concerns raised are certainly valid, we can look to the success of credit unions in countries that have already implemented open finance and realize these challenges are not insurmountable. They may actually present opportunities with an undeniable potential for growth and innovation and MORE data privacy and control. The future is hopeful. Now is the time to embrace open finance and reinvent the member experience.
Here are four important insights credit unions should know about the inevitable transformation to an open financial sector.
1. The world has shifted, and to keep up, U.S credit unions would be wise to join the open finance movement
Open finance is taking the globe by storm. The financial industries in Brazil, LatAm and the E.U. are opening legacy and consumer data and innovating new ways to support customers, even under strict regulations. Banks, credit unions, retailers and others in the sector are experiencing increased ROI, faster innovation and happier customers, thanks to open ecosystems.
The U.S. financial sector was preparing for open finance under 1033, but even though the ruling took effect on Jan. 17, 2025, without an operational CFPB, its enforcement is unclear. However, just because Elon Musk posted “R.I.P. CFPB” on X doesn’t mean open finance’s momentum will cease in the U.S.
2. Consumer expectations are driving the shift, not regulators
Nonprofit FDX has led the country in developing standards that support secure, interoperable, and consumer-permissioned data sharing. FDX continues to serve market needs effectively during this time of significant change.
Financial institutions and their partners want and need standardization for impactful collaboration. In fact, more than 94 million consumer accounts are now actively using the FDX API for secure, permissioned data sharing, as highlighted in their Fall Adoption Metrics Survey. This milestone represents an 18 million account increase since March 2024, underscoring the growing trust and adoption of standardized financial data-sharing practices across the industry.
Credit union members want security and the ability to easily share their personal data to use products and services. They might find it elsewhere if credit unions don't support their needs. In a 2023 McKinsey Consumer Financial Life Survey, 10% of respondents who said they had recently opened a deposit account did so with credit unions, down from 16% in 2015. Where are they going? The biggest banks have gained the share of account openings lost by credit unions, which now represent more than 40% of account openings. And they use digital capabilities to reach consumers who prefer to open new accounts online.
The survey also found that Baby Boomers represent the largest credit union member demographic - 39% in 2023. Meanwhile, credit unions face challenges in attracting younger people. A solid technology and integration focus is the right approach for credit unions looking to achieve cost-efficient results, but additional strategy is needed to attract new, younger members.
Credit unions have a fantastic potential to attract and retain members by offering innovative account access and greater control over their financial data. With or without CFPB's oversight, it’s clear open finance is the future of financial services. Credit unions that overlook this opportunity risk falling behind, as competitors already embracing it position themselves to capture the next generation of members. It’s time to seize the advantage of delivering the modern financial experience members expect.
3. Open finance partnerships are a competitive advantage
Financial institutions are already forming open finance ecosystems that improve customer experience, increase revenue, and drive innovation.
Open finance data also benefits the sharing institution, not just the receiving one. Financial providers can be transparent and open and experience good results. For instance, one of our Brazilian credit union clients reduced its account opening time from six days to just five hours. Another institution, as reported by the Brazilian Central Bank, cut onboarding time from 32 hours to 2 hours and 10 minutes by utilizing shared data. Open finance can transform and streamline operations. It elevates the member experience, inspiring credit unions to explore partnerships and possibilities to strive for better services and overall satisfaction.
Take Sicredi, Brazil's largest and oldest credit union service organization. The CUSO knew its members kept accounts in multiple institutions. Sicredi's leadership decided to transition to open finance early despite risks of increased competition with large banks and possible membership exodus. They understood quick adoption could lead to faster development of innovative products and services and better experiences for its members.
Connected ecosystem and rich data analysis through open finance allowed Sicredi to quickly tailor solutions and special offers, boosting member engagement. Instead of losing member accounts, Sicredi’s increased transparency and freedom of choice, particularly regarding competitive interest rates, increased membership. In a short time, 350,000 members shared their data. The institution launched over 300 new products, added $60 million in new branch account business, and $8 million in new funds from app users. Sicredi increased ROI and stayed true to their cooperative values. BMG Bank in Brazil similarly experienced a 240% increase in its customer base within the first year of implementing open finance, highlighting the growth potential when data is leveraged effectively. These success stories underscore the growth opportunities open finance brings to financial institutions.
What possibilities can your credit union imagine? Partnerships with auto dealerships to offer better lending options? Perhaps collaborating with local retailers to boost sales and support the community? The possibilities for growth and innovation extend past partnerships with FIs. It’s time to think beyond the box to imagine a connected and growing future.
4. APIs and technology are the easier path
Modern API management and open finance platforms make compliance and integration smoother than ever. The fear of integrating legacy systems and unlocking member data is unfounded. The good news is technology has advanced so much that implementing open finance may no longer require a complete legacy system overhaul.
API platforms, like Sensedia's, offer an easier, faster and more affordable solution for credit unions to unlock core systems, share data and form strategic partnerships. Having an experienced partner to help with the digital transformation provides peace of mind and a faster path forward. We've done it for financial institutions in Brazil, LatAm and the EU with amazing results. We're excited and prepared to transform U.S. credit unions, too.
Wrapping it up: the CFPB’s role is uncertain, but the financial industry’s direction is not
The world moves forward—whether industries embrace change or not. Cars quickly replaced horses, landlines gave way to mobile phones, and fax machines disappeared in favor of email and text. Imagine a world without cars or smartphones. Soon, it will be just as hard to imagine a financial system that isn’t open. Members expect seamless, modern solutions, and the industry is evolving to meet them. Is your credit union ready to lead in this transformation—or risk being left behind? The time to embrace open finance is now.
Lisa Arthur is U.S. Director and Global CMO for Sensedia.