Embracing Open Finance Innovation with MongoDB
The term "open finance" is increasingly a topic of discussion among banks, fintechs, and other financial services providers—and for good reason. Open finance, as the next stage of open banking, expands the scope of data sharing beyond traditional banking to include investments, insurance, pension funds, and more. To deliver these enhanced capabilities, financial service providers need a versatile and flexible data store that can seamlessly manage a wide array of financial data.
MongoDB serves as an ideal solution, providing a unified data platform that empowers financial services providers to integrate various data sources, enabling real-time analytics, efficient data retrieval, and scalability. These capabilities are pivotal in enhancing customer experiences, providing users with a comprehensive view of their finances, and empowering them with greater visibility and control over their own data. By adopting MongoDB, financial services can seamlessly adapt to the growing demands of open finance and deliver innovative, data-driven solutions.
Open finance's past and future
As highlighted in a study conducted by the Cambridge Centre for Alternative Finance
1
, the terms 'open banking' and 'open finance' vary globally. Acknowledging these differences, we'll focus on the model displayed in Figure 1 due to its widespread adoption and relevance in our study.
Figure 1.
The three waves of innovation in financial services.
The development of open finance started with open banking, which intended for banks to promote innovation by allowing customers to share their financial data with third-party service providers (TPP) and allow those TPP—fintech and techfin companies—to initiate transactions on their behalf solely in the context of payments. This proved to be an effective way to promote innovation and thus led to a broader spectrum of financial products adding loans, mortgages, savings, pensions, insurance, investments, and more. Leading to this new directive, commonly referred to as: open finance.
If we take a step further—regardless of its final implementation—a third development called open data suggests sharing data beyond the traditional boundaries of the financial services industry (FSI), exponentially increasing the potential for financial services by moving into cross-sector offerings, positioning FSI as a horizontal industry rather than an independent vertical as it was previously known.
Who and what plays a role in open finance?
Among the different actors across open finance, the most important are:
Consumers:
End-users empowered to grant or revoke consent to share their data primarily through digital channels.
Data holders:
These are mainly financial services companies, and thereby consumer data custodians. They are responsible for controlling the data flow across the different third-party providers (TPPs).
Data users:
Data users are common third-party providers offering their services based on consumers’ data (upon request/consent).
Connectivity providers:
Trusted intermediaries that facilitate data flow, also known as TSPs in the EU and UK, and Account Aggregators in India.
Regulatory authorities:
Set standards, oversee processes, and may intervene in open finance implementation. They may vary according to the governance type.
The interactions between all these different parties define the pillars for open finance functioning:
Technology:
Ensures secure data storage and the exposure-consumption of services.
Standards:
Establishes frameworks for data interchange schemas.
Regulations and enforceability:
Encompasses security policies and data access controls.
Participation and trust:
Enables traceability and reliability within a regulated ecosystem.
Figure 2.
High-level explanation of data sharing in open finance.
Drivers behind open finance: Adoption, impact, and compliance
Open finance seeks to stimulate innovation by promoting competition, safeguarding consumer privacy, and ensuring market stability—ultimately leading to economic growth. Additionally, it has the potential to provide financial institutions with greater access to data and better insights into consumers' preferences, allowing them to tailor their offerings and to enhance user experiences.
This data sharing between the ecosystem’s participants requires a regulated set of rules to ensure data protection, security, and compliance according to each jurisdiction. As seen in Figure 3 below, there are two broad drivers of open finance adoption: regulation-led and market-driven adoption. Whether organizations adopt open finance depends on factors like market dynamics, digital readiness, and regulatory environment.
Figure 3.
An illustrative example of open finance ecosystem maturity.
Even though there is not one single, official legal framework specifying how to comply with open finance, countries around the world have crafted their own specific set of norms as guiding principles. Recent market research reports reveal how several countries are already implementing open finance solutions, each coming from different starting points, with their own economic goals and policy objectives.
In Europe, the Revised Payment Services Directive (PSD2) combined with the General Data Protection Regulation (GDPR) form the cornerstone of the regulatory framework. The European Commission published a proposal in June 2023 for a regulation on a framework for Financial Data Access
2
(FiDA) set to go live in 2027.
3
In the UK, open finance emerged from the need to address the market power held by a few dominant banks.
In India, open finance emerged as a solution to promote financial inclusion by enabling identity verification for accounts opening through the national ID system.
The aim is to create a single European data space – a genuine single market for data, open to data from across the world – where personal as well as non-personal data, including sensitive business data, are secure and businesses also have easy access to an almost infinite amount of high-quality industrial data, boosting growth and creating value, while minimising the human carbon and environmental footprint.
4
Build vs. buy: Choosing the right open finance strategy
One of the biggest strategic decisions financial institutions face is whether to build their own open finance solutions in-house or buy from third-party open finance service providers. Both approaches come with trade-offs:
Building in-house
provides full ownership, flexibility, and control over security and compliance. While it requires significant investment in infrastructure, talent, and ongoing maintenance, it ensures lower total cost of ownership (TCO) in the long run, avoids vendor lock-in, and offers complete traceability—reducing reliance on external providers and eliminating “black box” risks. Institutions that build their own solutions also benefit from customization to fit specific business needs and evolving regulations.
Buying from a provider
accelerates time to market and reduces development costs while ensuring compliance with industry standards. However, it introduces potential challenges such as vendor lock-in, limited customization, and integration complexities with existing systems.
For financial institutions that prioritize long-term cost efficiency, compliance control, and adaptability, the building approach offers a strategic advantage—though it comes with its own set of challenges.
What are the challenges and why do they matter?
As open finance continues to evolve, it brings significant opportunities for innovation—but also introduces key challenges that financial institutions and fintech companies must navigate. These challenges impact efficiency, security, and compliance, ultimately influencing how quickly new financial products and services can reach the market.
1. Integration of data from various sources
Open finance relies on aggregating data from multiple institutions, each with different systems, APIs, and data formats. This complexity leads to operational inefficiencies, increased latency, and higher costs associated with data processing and infrastructure maintenance. Without seamless integration, financial services struggle to provide real-time insights and a frictionless user experience.
2. Diverse data types
Financial data comes in various formats—structured, semi-structured, and unstructured—which creates integration challenges. Many legacy systems operate with rigid schemas that don’t adapt well to evolving data needs, making it difficult to manage new financial products, regulations, and customer demands. Without flexible data structures, innovation is slowed, and interoperability between systems becomes a persistent issue.
3. Data security
With open finance, vast amounts of sensitive customer data are shared across multiple platforms, increasing the risk of breaches and cyberattacks. A single vulnerability in the ecosystem can lead to data leaks, fraud, and identity theft, eroding customer trust. Security vulnerabilities have financial consequences and can result in legal examination and long-term reputational damage.
4. Regulatory compliance
Navigating a complex and evolving regulatory landscape is a major challenge for open finance players. Compliance with data protection laws, financial regulations, and industry standards—such as GDPR or PSD2—requires constant updates to systems and processes. Failure to comply can lead to legal penalties, substantial fines, and loss of credibility—making it difficult for institutions to operate confidently in a global financial ecosystem.
These challenges directly impact the ability of financial institutions to innovate and launch new products quickly. Integration issues, security concerns, and regulatory complexities contribute to longer development cycles, operational inefficiencies, and increased costs—ultimately slowing the time to market for new financial services. In a highly competitive industry where speed and adaptability are critical, overcoming these challenges is essential for success in open finance.
MongoDB as the open finance data store
To overcome open finance’s challenges, a flexible, scalable, secure, and high-performing data store is required. MongoDB is an ideal solution, as it offers a modern, developer-friendly data platform that accelerates innovation while meeting the critical demands of financial applications.
Seamless integration with RESTful JSON APIs
According to
OpenID’s 2022 research
, most open finance ecosystems adopt RESTful JSON APIs as the standard for data exchange, ensuring interoperability across financial institutions, third-party providers, and regulatory bodies. MongoDB’s document-based model natively supports JSON, making it the perfect backend for open banking APIs. This enables financial institutions to ingest, store, and process API data efficiently while ensuring compatibility with existing and emerging industry standards.
Flexible data model for seamless integration
Open finance relies on diverse data types from multiple sources, each with different schemas. Traditional relational databases require rigid schema migrations, often causing downtime and disrupting high-availability services.
MongoDB's document-based model—with its flexible schema—offers an easy, intuitive, and developer-friendly solution that eliminates bottlenecks, allowing financial institutions to adapt data structures dynamically, all without costly migrations or downtime. This ensures seamless integration of structured, semi-structured, and unstructured data, increasing productivity and performance while being cost-effective, enables faster iteration, reduced complexity, and continuous scalability.
Enterprise-grade security and compliance
Security and compliance are non-negotiable requirements in open finance, where financial data must be protected against breaches and unauthorized access. MongoDB provides built-in security controls, including encryption, role-based access controls, and auditing.
It seamlessly integrates with existing security protocols and compliance standards, ensuring adherence to regulations such as GDPR and PSD2.
MongoDB also enforces privileged access controls and continuous monitoring to safeguard sensitive data, as outlined in the
MongoDB Trust Center
.
Reliability and transactional consistency
Financial applications demand zero downtime and high availability, especially when processing transactions and real-time financial data. MongoDB’s replica sets ensure continuous availability, while its support for ACID transactions guarantees data integrity and consistency—critical for handling sensitive financial operations such as payments, lending, and regulatory reporting.
The future of open finance
The evolution of open finance is reshaping the financial industry, enabling seamless data-sharing while introducing new challenges in security, compliance, and interoperability. As financial institutions, fintechs, and regulators navigate this shift, the focus remains on balancing innovation with risk management to build a more inclusive and efficient financial ecosystem.
For organizations looking to stay ahead in this landscape, choosing the right technology stack is crucial. MongoDB provides the flexibility, scalability, and security needed to power the next generation of open finance applications—helping financial institutions accelerate innovation while ensuring compliance and data integrity.
In Part 2 of our look at open finance, we’ll explore a demo from the Industry Solutions team that leverages MongoDB to implement an open finance strategy that enhances customer experience, streamlines operations, and drives financial accessibility. Stay tuned!
Head over to our
GitHub repo
to view the demo.
Visit our
solutions page
to learn more about how MongoDB can support financial services.
1
CCAF, The Global State of Open Banking and Open Finance (Cambridge: Cambridge Centre for Alternative Finance, Cambridge Judge Business School, University of Cambridge, 2024).
2
“The Financial Data Access (FiDA) Regulation,” financial-data-access.com, 2024,
https://www.financial-data-access.com/
3
Maout, Thierry, “What is Financial Data Access (FiDA), and how to get ready?”, July 16th, 2024,
https://www.didomi.io/blog/financial-data-access-fida?315c2b35_page=2
4
European Commission (2020), COMMUNICATION FROM THE COMMISSION TO THE EUROPEAN PARLIAMENT, THE COUNCIL, THE EUROPEAN ECONOMIC AND SOCIAL COMMITTEE AND THE COMMITTEE OF THE REGIONS, EUR-Lex.
March 25, 2025