Open Finance risk: Five things that happened in May that you need to know about

May was a busy month in Open Finance. Here is what happened, why it matters, and what it means for risk management.

US: Trump signed a fintech Executive Order – two things have to happen for it to mean anything

The US Executive Order directing federal regulators to streamline fintech rules made headlines. At Invela, we support the goal entirely. But two specific actions will determine whether ambition becomes action: a new Section 1033 proposal from the Consumer Financial Protection Bureau (CFPB), and clarification from prudential regulators on how third-party risk management applies to Open Banking relationships. Without both, the barriers remain – not because anyone opposes innovation, but because the infrastructure that makes innovation safe doesn’t yet exist. More here.

US: the states aren’t waiting for Washington

New York lawmakers advanced companion bills establishing a state-level financial data access regime modelled directly on the CFPB’s 1033 rule. Governor Newsom appointed Rohit Chopra – the former CFPB director who wrote the original rule – to lead California’s new financial services agency from 1 July 2026.

The ‘wait for federal certainty’ argument is running out of road. Open Finance data flows are already happening. The risk already exists today. State-level compliance deadlines may arrive before any federal rulemaking concludes. The institutions building risk management infrastructure now will be the ones that can demonstrate adequate controls when their regulators ask. More here.

UK: the government showed its hand

The Smart Data 2035 Strategy and the response to the digital markets Call for Evidence landed in the same week. Together they set a target of five or more active Smart Data schemes by 2030, with Open Finance as a priority sector.

The ambition is not in question. The infrastructure question is. Every scheme depends on the same underlying architecture – standardised accreditation of participants, continuous risk intelligence, and clear liability allocation when something goes wrong. That architecture is being built by Invela to deliver the scale the strategy requires. More here.

UK: the Future Entity debate is asking the wrong question

The Financial Conduct Authority published its evaluation of the Open Banking Future Entity candidates. Open Banking Limited won. Governance question: largely settled.

But the debate has been almost entirely about who sets the standards. A Future Entity can define who is allowed in the room. It cannot tell you whether the people in the room are safe to share data with – in real time, continuously, across the full participant chain. Behind the UK’s 17 million Open Banking users sit thousands of unregulated fourth, fifth and nth parties, largely invisible to the institutions whose customers’ data flows through them. That gap is where the risk lives. More here.

Europe: The risk gap nobody is talking about

PSD3 is in motion. The Data (Use & Access) Act has passed. FiDA is somewhere on the European Commission’s desk. Good. But compliance and risk management are not the same thing. You can tick every regulatory box and still have no answer to who bears the liability when something goes wrong three steps down your Open Finance chain.

Regulators govern vertically. Open Finance data and payments move horizontally – through intermediaries, fintechs, fourth parties, nth parties. No single regulator is watching the gaps. That is not a failure of regulation. It is a structural feature of how Open Finance works. And it means the market has to build what regulation cannot. More here.

Louise Beaumont is head of marketing and communications at Invela

Invela is the infrastructure layer that makes Open Finance trustworthy – accrediting who’s in the network, monitoring risk in real time, and ensuring liability lands in the right place. Read more at Open Finance Risk Management Network | Invela

Invela is an Event Partner of Open Banking Expo UK & Europe 2026. Find out more about partnering, attending and speaking here.