Spanish banking giant Grupo Santander has rolled out its digital banking platform Openbank to the US market, marking a significant expansion beyond its current Northeastern network. The digital-only bank, already well established in the EU, will initially offer a high-yield savings account with an APY of 5.25%. The company plans to launch additional products in 2025.
Openbank’s cutting-edge platform, which also features international technology development hubs for the broader financial services industry, has important strategic implications for fintech companies based in the US.
Openbank’s entry into the US market will likely spur digital banking innovation and competition. Currently, however, US fintechs face several challenges which have, in some respects, left them lagging behind EU startups. For instance, the EU benefits from a relatively harmonized regulatory environment due to directives like the Second Payment Services Directive (PSD2), which has driven rapid growth in open banking (not to be confused with Openbank) initiatives. By contrast, US regulation is highly fragmented, with directives at both state and federal levels creating a complex patchwork of laws that complicate nationwide expansion.
Fortunately, Openbank’s expansion into the US spells good news for fintechs. The platform’s API-driven approach should make it easier for fintechs to integrate additional services, such as budgeting and credit monitoring tools, into their products. Moreover, Santander’s expertise in compliance – not to mention their global innovation hub – could also pave the way for other fintechs to tackle regulatory challenges. There’s also another potential benefit in that it might influence investor confidence in and focus on US-based fintechs.
What can US fintechs learn from Openbank’s expansion?
The majority of US consumers already use mobile apps for banking operations more than any other method. That figure is only likely to grow. This also highlights the growing importance of digital-first and cloud-native platforms like Openbank, which offer benefits like cost efficiency, high scalability, and rapid deployment of new features.
Openbank’s tech-driven approach will further add pressure on existing banks – both traditional and digital – to enhance their service offerings to retain customers. Furthermore, the potential of reduced operational costs also means Openbank can offer more attractive interest rates than those offered by competitors like Goldman Sachs and CIT Bank.
The Openbank platform was launched in the US in October 2024 and accessible by eligible US customers via both the mobile application and through the bank’s US website. Thanks to a straightforward and largely automated onboarding process driven by a heavy focus on client experience, there’s every chance that the initiative will have a major impact on the US market in the years to come.