Banks are essential to the economy and have historically held a monopoly on consumer transaction data. However, this data ownership could be crucial in real-world frictions, as banks may be motivated to hold this valuable resource to avoid competition and foster a data monopoly. Open banking addresses this issue by reducing data ownership in the banking industry. The unbundling of traditional banking in the late 2010s led to the growth of fintech and a shift in competition between fintech companies and traditional financial institutions. The next generation of open banking is open finance, a transparent banking model centered on sharing data, assets, resources, and products. A study in Indonesia found that a co-innovation platform between fintech and digital banks positively impacted company development through radical and incremental innovation. Open banking is revolutionizing financial services by enabling third-party developers to access bank data through APIs. However, it presents challenges such as security, privacy, and regulatory compliance issues. Collaboration among stakeholders is crucial for addressing these risks, while implementation challenges include cybersecurity threats, regulatory compliance, and low adoption due to poor consumer education. Open banking success relies on customers’ willingness to share information, and regulators must foster an environment that supports its growth.