Demystifying Open Banking’s Big Scary Things

In honor of Halloween today, let’s take a look at the “scary” topics that might keep people up at night when it comes to Open Banking. Between evolving regulatory conversations and the pressure to modernize data access, it’s easy to think, “where do I even start?”

You’re not alone. Financial institutions across the United States  are asking:

• “What if I build something that’s not compliant with 1033?”
  
  
• “How do I build an API that will actually get used?”
  
  
• “How can I scale it when the traffic starts coming in?”

The truth is, these aren’t monsters lurking in the shadows — they’re just unknowns waiting to be unmasked. And once you do, you’ll see that the path forward isn’t as scary as it seems.

At MX, we’ve helped some of the largest financial institutions in the U.S. navigate these exact challenges. Here is a look at the “big scary things” in Open Banking and how to unmask the reality behind them.

Monster #1: “What if I’m Not Compliant with 1033?”

The Fear: The CFPB’s evolving definition and enforcement of Rule 1033 has left many financial institutions hesitant to begin building their open banking APIs. The uncertainty of what Rule 1033 demands and whether its stated compliance deadlines (starting in April 2026 for the largest institutions) will go into effect can make every API decision feel like a costly gamble.

The Reality: The foundation for compliant APIs already exists, and it’s called the Financial Data Exchange (FDX) standard. FDX’s standards have created a market-led, widely adopted framework that meets the spirit (and much of the letter) of what Rule 1033 will require. It’s been tested, trusted, and refined by some of the largest financial institutions and data recipients in the world.

The FDX API standard is a great place to start with building your API because it directly addresses the core demands of Section 1033:

• Use OAuth 2.0 and OpenID Connect for secure, tokenized access
  
  
• Manage granular consumer consent for data sharing
  
  
• Ensure data standardization and interoperability across providers

The takeaway: Regardless of where the CFPB’s Section 1033 rulemaking ultimately lands, FDX is a great blueprint for compliant and secure Open Banking in the U.S. — and the great place to start your Open Banking journey.

Monster #2: “How Do I Even Build This?”

The Fear: Where do you even begin the massive, complex project of converting your data infrastructure into a consumer-permissioned, FDX-compliant API? Do you really have to build every single piece yourself?

The Reality: You don’t have to build it alone. The Open Banking ecosystem already has trusted partners, platforms, and data intermediaries built around the FDX standard. Rather than starting from zero, you can leverage market-ready solutions that streamline the process and accelerate your go-to-market timeline.

Finding the right platform partner can turn the frightening prospect of building a full API into a ready-to-implement advantage. Platform partners like MX offer products specifically designed to:

• Streamline API Creation: Provides the "ready-to-wear" framework that sits on top of your core system, handling the complex OAuth 2.0 Security Profile and the FDX data translation layer for you.
• Ensure Compliance by Design: These products are pre-engineered to meet the strict FDX protocols, giving you confidence that your API launch will be compliant.
• Simplify Management and Maintenance: You shift the burden of keeping up with version updates and patching the system to a dedicated partner, freeing your internal teams to focus on core banking innovation.

The takeaway: You don’t need to reinvent the wheel. By partnering with a trusted Open Banking platform, you can get to market faster, reduce risk, and ensure compliance from Day 1.

Monster #3: “What Happens When the Traffic Hits?”

The Fear: Once third parties shift from screen scraping to your API, how will your infrastructure handle the sudden surge in connectivity traffic?

The Reality: A unified, FDX-based API actually makes scaling easier. Today, the FDX ecosystem supports more than 5 billion API calls per month for more than 94 million consumer accounts. This model has already proven its ability to handle large-scale, real-time data sharing.

By adopting the FDX standard, you’re replacing hundreds of custom, brittle screen-scraping connections with a single, standardized access channel. That means:

• Less technical debt: Ensuring fewer broken connections to fix down the road
• Predictable performance: Enabling you to handle high-volume, token-based requests
• Simpler monitoring and scaling: Providing one system to manage, not hundreds

The takeaway: What looks like a scalability monster is actually your biggest efficiency win.

Don’t Let the Monsters Scare You

The road to Open Banking doesn’t have to be as spooky as it seems. With the right standards, partners, and strategy, you can turn regulatory uncertainty into confident innovation.

Let’s unmask those Open Banking monsters together.

Learn how MX can help your institution build and manage an FDX-compliant API.