Cryptocurrencies are proving that technology makes it difficult for policymakers to find the balance between encouraging valuable financial innovations and regulating dangerous economic hype. Data-sharing applications that facilitate open banking are the latest examples of technological innovations that boast of valuable new competitive opportunities for financial institutions and their customers. But by now, policymakers should realize that cyberspace is a buyer-beware zone.

Sharing data so that consumers can complete financial transactions more efficiently sounds terrific. Third-party providers who will get their hands on this valuable information will certainly think so. But financial institutions should be cautious about sharing the massive amounts of highly confidential data they maintain about customers who often misunderstand the relative risk/reward ratio of sharing it.

Open banking typically relies on innovative application programming interfaces (APIs) that allow consumers to share their bank and credit card transaction data with everyone from financial to health care providers to increase functionality and efficiency. While platforms that share data with such applications and services may save consumers time and money, the moment data is shared across companies or industries, the risk of execution failure and the potential for fraudulent third-party provider access increases, not to mention the creation of serious economic infrastructure and national security risks. The more providers that touch or are unaccountable for a user’s data, the greater the number of vulnerabilities there are.