New York introduces first US state-level open banking legislation

A proposed New York bill would create the first state-level open banking-style data access regime in the US, adding a new regulatory layer alongside the federal CFPB rule currently facing legal challenge.

New York State has introduced legislation that would grant consumers the right to share their financial data with authorised third parties, mirroring the structure of open banking frameworks already established in the UK and EU. If enacted, it would be the first such regime at state level in the US.

The timing is significant. The CFPB’s federal open banking rule, finalised under the Biden administration, faces ongoing legal challenges and an uncertain future under the current White House. A state-level regime in the country’s largest financial centre would create a parallel compliance obligation for banks and fintechs operating in New York, regardless of the federal rule’s fate.

For European open banking providers eyeing the US market, New York’s move signals that data-sharing mandates are advancing through multiple channels. It also raises the prospect of a fragmented US regulatory landscape, where institutions must navigate both federal and state-level requirements, a dynamic familiar to those tracking data protection law in the US.

Editorial note: A state-level open banking regime in New York is a material development for any European firm with US exposure, and illustrates how open banking policy is evolving differently across jurisdictions.

Sources: New York Proposes Open Banking-Style Financial Data Access Legislation — JD Supra

FCA sandbox applications rose 49% in 2025, driven by AI and open banking

Applications to the FCA’s Regulatory Sandbox and Innovation Pathways jumped sharply last year, with open banking, open finance and AI among the dominant use cases.

Applications to the FCA’s sandbox and innovation programmes rose 49% in 2025 compared with the prior year. AI, distributed ledger technology, open banking and open finance were the main technologies cited by applicants.

The FCA has indicated that it will focus on clearer testing criteria and broader engagement with applicants during 2026. The surge in applications suggests that firms are actively seeking regulatory guidance ahead of the UK’s anticipated open finance framework, rather than waiting for final rules. It also reflects the degree to which AI-powered financial services are now a mainstream regulatory concern, not a fringe experiment.

For European firms, the data point is a useful benchmark. The FCA’s sandbox has long been a bellwether for where innovation pressure is building. A near-50% rise in applications, concentrated in open banking and AI, confirms that product development is running ahead of regulation in these areas.

Editorial note: The sharp rise in FCA sandbox applications is a concrete indicator of where UK fintech innovation is concentrating, and signals regulatory demand that will shape the open finance framework.

Sources: FinTech Global FS Regulatory Round-up – W/e 24 April 2026 — Mondaq