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Open Banking: Action required to avoid UK falling behind
Consumers in the UK should be given a ‘Smart Data Right’, says policy group Coadec and 24 fintechs and industry groups.
Action is required to avoid the UK falling behind other open banking regimes like Australia and South Korea, according to policy group Coadec.
The UK’s open banking industry, which has been a standout leader in the trend, needs to be refined in order to further its potential, the group says.
This includes removing the 90-day re-authentication requirement and more proactive enforcement by the FCA.
Nearly four million UK consumers have used open banking solutions over the last three years but the potential of open finance will only be realised with a Smart Data Right, with consumers limited in what they can currently consent to share securely.
In total 24 fintechs and other industry bodies have also signed an open letter to Paul Scully, Minister responsible for Smart Data, and John Glen, Economic Secretary to the Treasury, advocating for a Smart Data Right in the 2022 Queen's Speech.
Signatories to the letter include: Coadec, Aire, Butter, Chip,Codat,Crezco,Fluidly,Fronted,Innovate Finance, iSpent19, Klarna, LoyalBe, Monzo,PensionBee,Plaid,Plend,Plum,Revolut,Snoop, Tomato Pay, Truelayer, Untied, Wise,Yapily and Youtility.
Charlie Mercer, Head of Economic Policy at Coadec, said: “Open banking has empowered millions of UK consumers to realize the potential of their financial data but they, and the innovators producing the next generation of financial services, are hindered by the arbitrary limits of the regulation to date. It’s time for open finance, but the route to getting there has so far been unclear.”
“With this report, produced in partnership with startups across the UK Tech ecosystem, we have shown why a Smart Data Right is the best path to open finance. This has been promised, but must now be delivered, and we urge the government to ensure that we hear those three words echoing around the House of Lords in Spring 2022.”
Adam Jackson, Director of Policy at Innovate Finance, said: “Open banking has fuelled financial innovation in the UK. As adoption spreads in other countries, going further and faster on smart data would maintain the UK as a hotbed for innovation. A Smart Data Right, as called for in this letter and Coadec's report, would be the best next step, maximising the possibilities of a Smart Data economy and putting consumers in control of their data."
The full report can be found here.