Updated Information: US Banks now utilize a new Ozone API tool for estimating the financial implications of constructing API infrastructure.
Ozone API, a leading provider of Open Banking solutions, has launched a new cost estimation tool called 'Build It Calculator' in the US. This innovative calculator is designed to help US banks evaluate the investment required to meet new data-sharing obligations due to compliance deadlines, particularly those under Section 1033 of the Dodd-Frank Act.
The 'Build It Calculator' is a valuable resource for banks as they navigate the uncertain regulatory landscape surrounding Open Banking in the US. The calculator factors in hidden long-term costs, including annual maintenance, which can amount to half of the original implementation spend every year. It uses various inputs, such as project duration, hosting costs, value of deposits, and staffing needs, to estimate the cost of developing an in-house API infrastructure.
Banks can receive a tailored estimate from Ozone API's calculator in a single call, helping them plan initiatives that may scale to eight-figure investments. The tool has been validated by US financial institutions and offers banks a clearer picture of what Open Banking compliance may require in terms of resources and recurring costs.
Eyal Sivan, the General Manager, North America at Ozone API, emphasized the importance of banks having accurate data to make informed decisions about building their own API infrastructure or partnering with solutions providers. He stated, "The 'Build It Calculator' takes into account the experience Ozone API has in delivering Open Banking platforms globally. It is a response to the need for US banks to prepare for Open Banking compliance and manage associated costs effectively."
It is crucial to note that the specific requirements for U.S. banks under Section 1033 of the Dodd-Frank Act include making consumer financial data available to consumers and authorized third parties on request without charging fees, and developing and maintaining interfaces for secure data sharing. However, the rule is currently under litigation and regulatory reconsideration. The CFPB has paused enforcement to substantially revise the rule, aiming to address concerns including data security, privacy, access costs, and interface requirements.
This ongoing process means final specific mandates and cost implications remain uncertain pending new rulemaking and public commentary. Compliance costs could include investments in IT infrastructure to build and maintain data-sharing interfaces, costs linked to securing consumer data, operational expenses to handle data requests, and costs associated with adapting to any fee restrictions or exemptions. Community banks under $850 million in assets are partly exempt from certain interface requirements, potentially lowering burdens for some small institutions.
Despite the regulatory uncertainty, the 'Build It Calculator' can help banks estimate these compliance costs by allowing them to input their specific parameters—such as institution size, transaction volumes, and data-sharing needs—to model and forecast the technology and operational expenses involved in complying with Section 1033. This tool aims to provide a tailored cost outlook to inform budgeting and strategic planning around open banking implementation requirements. However, since the regulatory framework remains unsettled, the calculator would best be used with assumptions that may be updated as regulatory clarity emerges.
The 'Build It Calculator' is now live in the US, with plans to expand into additional markets globally, including the UK, MENA, LATAM, and APAC regions. Banks and fintechs are closely watching for forthcoming CFPB announcements and revised rule proposals expected soon.
- The 'Build It Calculator' launched by Ozone API, a leading Open Banking solutions provider, is designed to aid US banks in evaluating the investments needed to meet new data-sharing obligations under Section 1033 of the Dodd-Frank Act.
- Ozone API's 'Build It Calculator' factors in variables such as project duration, hosting costs, value of deposits, and staffing needs to estimate the cost of building an in-house API infrastructure.
- Eyal Sivan, General Manager, North America at Ozone API, highlighted the importance of accurate data for banks in deciding whether to build their own API infrastructure or partner with providers, emphasizing that the 'Build It Calculator' uses global Open Banking experience to offer tailored estimates.
- The 'Build It Calculator' can help banks estimate costs associated with compliance under Section 1033 of the Dodd-Frank Act, including IT infrastructure, data security, operational expenses, and any fee restrictions or exemptions, although regulatory uncertainty remains pending new rulemaking and public commentary.
