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UK fintechs call for smart data right to drive open finance

UK fintechs call for smart data right to drive open finance

A coalition of UK fintechs has signed an open letter calling on the government to fast track a 'smart data right' that enables consumers to control their data, opening up the potential of open finance.

The letter, organised by advocacy group the Coalition for a Digital Economy (Coadec), and signed by a host of challenger banks, data aggregators, personal financial management providers and payment firms, calls for a smart data right to be included in next year's Queen's Speech.

The UK led the world in rolling out an open banking regime. Nearly four million Brits have used open banking solutions over the last three years.

However, a report accompanying the letter warns that government intervention is needed in order to move beyond open banking and realise the potential of open finance and prevent the UK from falling behind the likes of Australia and South Korea.

Specific reforms include removing the 90-day authentication requirements currently foisted on users of Open Banking and an element of compulsion for real-time data sharing by incumbents data holders.

By introducing a smart data right and letting Brits share more of their data, the report argues that the UK will see improved competition, innovation, better services and, according to a McKinsey report, a potential increase of 1-1.5% in GDP by 2030.

Adam Jackson, director of policy, Innovate Finance, says: "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.”

Read the report

Comments: (1)

Andrew Smith
Andrew Smith - RTGS & ClearBank - London 21 September, 2021, 10:08Be the first to give this comment the thumbs up 0 likes

This will only happen if the FinTech firms themselves look at how they control and manage customer data. This is all very possible if the customer is truely at the centre of the ownership of data. 

If we really want open finance, then FinTech firms should be embracing SSI digital identity technology from providers like ID Crypt Global, Evernym etc. That way the customer is at the heart of data owenership and total control - then we can talk Open Finance and an effective Open Banking implementation.....Coadec then at least has a workable model that they can put forward and enforce (almost) banks to embrace that approach....