FCA consults on how open finance could transform financial services
The UK Financial Conduct Authority has launched a call for input on the opportunities presented by so-called ‘open finance’.
What has happened?
The UK Financial Conduct Authority (FCA) has published a call for input to explore opportunities and risks arising from open finance. The FCA wants to understand what is needed to ensure open finance develops in the best interests of consumers, as well as what role it should play.
What does this mean?
The increasing use of data and technology is changing how financial markets work, which has led to greater innovation as new business models and ways of engaging with customers have emerged.
Open banking - the sharing of data which provides new ways for customers and businesses to make the most of their money - has been a key development in the UK.
Open finance builds on the principles of open banking and would extend them to a wider range of products and to give consumers and businesses more control over a range of their financial data, such as savings, insurance, mortgages and pensions.
Open finance has the potential to deliver "transformative benefits" for both consumers and providers.
Christopher Woolard, Executive Director of Strategy and Competition at the FCA, said:
"Data and technology are increasingly driving changes in financial markets. As a regulator, we need to understand how this change will shape markets and regulation in the future.
"We want to understand how open finance can develop to best meet consumers’ needs and enhance competition in the interests of consumers. We also want to understand what role we should play in supporting it."
The FCA has been leading the public debate on open finance and set up an advisory group to drive forward its future strategy.
The advice of the group, which comprises industry experts; consumer and business representatives; government departments and academics, has also been published.
What happens now?
Responses to the call for input can be submitted through an online response form by 17 March 2020.
The FCA will publish a feedback statement in summer 2020.