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CFIT advances open finance pilots for consumers and SMEs

CFIT advances open finance pilots for consumers and SMEs

The UK Centre for Finance, Innovation and Technology (CFIT) is to build two working prototypes of open finance applications for providing financial advice to vulnerable consumers and to speed up credit assessments for SME loan applications.

The initiative builds upon proofs of concepts already conducted with Citizen Advice and HSBC with the objective of serving as a pre-cursor to the broader adoption of Open Finance across the UK’s financial services sector.

The initial SME PoC with HSBC demonstrated that accessing new datasets and auto-populating business loan applications can lead to a significant boost in SME lending decisions. CFIT reports that a quarter of businesses from a sample of SMEs whose loan applications had been referred for manual underwriting, could be given access to finance had open finance been in place. Additionally, they found it could lead to fewer SMEs giving up on applications.

For the working prototype, the agency is calling on other SME lenders, including Barclays, to coalesce around a project that it says could close a potential £22 billion funding gap for UK SMEs.

Barclays Bank is also working with the CFIT on pilots to boost the care provided to vulnerable consumers by Citizens Advice client teams who will be able to draw on open financial data to deliver more rounded advice for those struggling with debt burdens and financial worries.

This initiative builds on a dashboard previously produced by CFIT with Citizens Advice to demonstrate how allowing CA clients to seamlessly share their financial data could provide tailored financial advice to 40% more consumers facing financial difficulties and distress - supporting an extra 150,000 people annually.

Commenting on Barclays Bank’s role on the CFIT Taskforce, Jason Turner, director of open banking, says: “The environment in which businesses and consumers operate is rapidly changing, and cross-industry technology will play a vital role in meeting their evolving needs.”

CFIT CEO Ezechi Britton, comments: “CFIT launched in 2023 with a mission to enhance the UK’s fintech sector and deliver benefits for consumers and SMEs - and the entire economy. I am pleased to say that we are delivering on this mission by creating industry-led partnerships that take Open Finance proofs of concept and turn them into working prototypes in selected areas of the UK.”

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