The news: Truist has partnered with Mastercard to launch its first open banking integration. Truist consumer and small business customers will be able to connect their bank data to fintech apps that participate in Mastercard’s open banking network via direct API connections.

Zoom out: The private sector began developing open banking infrastructure over a decade ago, driven by commercial demand for data sharing. But last year, the Consumer Financial Protection Bureau said it would rescind and rewrite the 2024 Biden-era open banking rule, creating regulatory uncertainty.

The framework and technology for open banking remained intact after the rule was withdrawn, but JPMorgan Chase announced plans to charge for access to customers account data, and PNC considered doing the same.

Implications for banks: Banks that have neglected open banking are well behind the times. Fintechs are ingrained in consumer behavior, and larger players have the scale and technology to peel away customers with superior experiences. The long-standing fear has been that making it easier for consumers to let fintechs access their data could erode banks’ own primary relationships with them.

That concern has largely proven overstated. The banks that did enable open banking APIs have not faced a mass exodus; instead laggards fell behind in robustly and securely supporting consumers’ apps of choice. Even with open banking regulation on ice and compliance deadlines eased, banks should recognize that fintechs can complement banking services.

A complementary relationship with fintechs can help banks defend against apps that increasingly encroach on banking services. When banks struggle to deliver a winning digital experience on their own, enabling customers to integrate trusted third-party tools reduces friction—and makes switching less attractive.