The recent speech by the King reaffirmed we could be approaching a change in UK law with the potential to completely transform our lives and accelerate economic growth. The government has committed to enabling the implementation of revolutionary new technologies via the Data Protection and Digital Information (DPDI) Bill.
The final objective is to reach ‘open data’, where all types of information, whether it be personal financial data or employment details can be shared securely within a trusted platform. Users will have the ability to verify their identity online with the same assurance as with traditional documents. With the accelerated development of digital, more products and services are being purchased and consumed online.
If people can select and securely share their data with trusted groups, it will enable them to instantly receive new offers customised to their requirements and situations.
The Department for Science, Innovation and Technology has estimated that the bill will strengthen the UK economy by £4.7 billion in the next decade. Open finance could deliver a future where your devices can enable you to make smarter decisions in every part of your financial life, from budgeting to retirement planning. This could revolutionise financial literacy and instantly offer people a comprehensive understanding of their finances. This would be critical at a time when many people are experiencing financial challenges with the cost of living and a decline in household incomes.
Smaller companies also face barriers to obtaining a clear concept of their finances, which impacts their planning, budgeting and forecasting.
Open financing takes centre stage
Open finance can become a priority in the UK’s movement towards open data. Financial services consist of a large portion of most people’s and businesses’ data footprints. It’s inconceivable to achieve a modern, digitally driven connected economy without focusing on financial datasets.
Fortunately, the UK has a globally recognised fintech industry with the ability to respond quickly, deliver new products and collaborate with larger, more established organisations.
Nikhil Rathi, the CEO of the Financial Conduct Authority, detailed the opportunities a digital identity offers for customers. The Government is using the success of open banking as the initial step towards creating a smarter data economy. We are also witnessing progress within open finance and how to apply open-banking data-sharing within finance is a priority on the industry agenda.
CFIT has delivered an industry-wide coalition on supporting open finance, allowing for the secure sharing of all types of financial data. By next year, a series of recommendations for industry and government will be released.
If delivered correctly, open finance will provide customers with greater control of their financial lives and stronger access to financial support and affordable credit products. SMEs will benefit from fewer barriers to accessing banking services. Open banking has shown us the path, now the open finance revolution is the next step to enable all datasets, so the UK can become a competitive, smart data nation.