The Consumer Financial Protection Bureau’s (CFPB’s) final open banking rule, expected this fall, is creeping closer. The proposed rule was released in October and the CFPB released interim guidance for some industry participants in June. It’s becoming increasingly important for bankers to understand the upcoming rule and how it will affect their businesses. On top of the next few months, financial institutions (FIs) have an onramp to plan how they respond. They shouldn’t wait for a vendor to tell them what to do — they need an open banking strategy.

A compliance timeline staggered by asset size will give FIs some breathing room. The first compliance date, which is scheduled for six months after the final rule is published, will apply only to the eight largest US banks. The megabanks have built open banking-related tools in-house, are sustaining members of the major US open banking standard-setting body, and are likely well-prepared to adapt to the CFPB’s rule. Several other large banks are also sustaining members of the standard-setting body and have the resources to prepare.

The roughly 25 banks and two credit unions with between $50 and $500 billion in assets have a little more time than the megabanks. They have a year to comply and, in partnership with their vendors, should be able to muster the resources to dedicate to compliance with the open banking rule. They also have substantial customer bases, which gives them the benefit of scale with their technology and increases the probability that open banking will have a positive return on investment rather than just be a compliance cost.

Despite a less stringent timeline, smaller FIs will be in a tougher spot. Widespread compliance — meaning for the over 1,000 banks and almost 500 credit unions with $850 million to $50 billion in assets — starts 2.5 years after the open banking rule is finalized. Thousands of other small banks and credit unions will be required to comply within four years. Most of them, especially the smaller FIs, will inevitably depend on vendors for open banking compliance. Those that run on low-cost technology from single vendors may have to make do with minimum viable products.

To adapt relatively seamlessly to open banking, bankers across the spectrum will need a solid understanding of what it is and how it will affect them. The CFPB’s implementation timeline may look like a luxury for FIs whose deadlines are the furthest out, but kicking the can down the road on board-level discussions will only make adapting to open banking harder. Open banking will be mandatory for everyone, so FIs should make the best of it. Any that haven’t had discussions about open banking should start now — and on the top of the agenda should be how it will affect the FI’s business strategy and how it will fit in with technological and strategic issues that should already be part of the discussion.

Our report “US Open Banking 2024” covers the history of consumer financial data-sharing in the US, the CFPB open banking rule’s implications for how consumers access their financial data, compliance challenges for FIs, and the industry’s way forward.

Click here to read the key findings and download a free copy.