Consumers and businesses could be given greater control over their financial data to help secure better deals through open finance, the FCA claimed today.
The regulator said open finance will “transform how people interact with financial services.”
It said open finance will unlock the potential for people and businesses to share their financial data securely with a range of financial services providers, helping them access mortgages, investments, savings and pensions.
It said the move will give financial services firms a more complete picture of consumers’ and businesses’ finances, allowing more personalised and inclusive services, alongside more competitive pricing and stronger fraud protection.
The FCA said it will prioritise exploring how open finance can help SMEs improve access to credit and speed up loan applications. It will also examine how open finance can help consumers manage and improve access to mortgages.
David Geale, executive director of payments and digital finance at the FCA, said: "Open finance has the potential to transform how people interact with financial services. By giving consumers and businesses more control over their own financial data, we can help them access credit, secure better deals and receive more customised support - while fuelling innovation, competition and supporting economic growth.”
To progress plans as quickly as possible, the FCA said it will engage with industry, consumer groups and fellow regulators during the year to develop a range of practical open finance use cases. That will be done through the FCA's Smart Data Accelerator and PRISM (Prioritisation and Real-world Insights Selection Matrix) Taskforce, it said.
Damien Burke, head of regulatory practice at consultancy Broadstone, said: “Open finance has the potential to transform how consumers access financial services and it is energising to see the FCA accelerating these plans. Leveraging this technology can create a market that enables institutions to have a clearer view of the consumers they support and drive economic growth via further innovation in the UK’s dynamic financial services sector."
The FCA said it will work with the Treasury on options for a regulatory framework for open finance by the end of 2027. Firms will be supported to introduce open finance products sooner where they are already able to access data and appropriate permissions are in place.
The FCA said it will consult on its proposed long-term regulatory framework for open banking before the end of 2026. Open banking is a secure and regulated way for people and businesses to share access to payments data from their bank account with trusted apps and services.
The regulator reported that open banking has approximately 17m users, representing nearly 1 in 3 adults in the UK.