Big Banks, Big Tech, and Big Data: Explaining Public Support for Open Banking

• In Event: The Global Economy and the Welfare State

Abstract

With the expansion of the digital economy, traditional firms in sectors like transportation, hospitality, and media are experiencing new forms of regulatory and market contestation. However, conflicts within the financial sector differ in important ways, as banks typically enjoy considerable structural power while also engendering low levels of public trust. These dynamics thus offer new insights into digital transformations and the accompanying politics among the public, state regulators, and new and established firms. This paper asks: what are the determinants of public support for “open banking” policies? Already established in several countries and actively in development in many more, open banking either facilitates or mandates the sharing of customers’ financial data (with their consent) between banks and technology firms. Unlike more technical elements of financial regulation, the politics of open banking are salient to broader public concerns around monopoly power, data security, and foreign technology firms. Empirically, this paper employs an original survey experiment fielded in Canada, where open banking is currently in development. I assess how individual attitudes are affected by alternative frames emphasizing the benefits of greater market competition, potential risks for data security, and the entrance of foreign technology firms in the financial sector.

Author

• Tyler Girard, Duke University