Open Finance will build on the principles of Open Banking which allows the sharing of client data with third parties to encourage competition and innovation.
The FCA says that Open Finance would extend the principles of Open Banking to a wider range of products.
Financial advisers will be consulted along with investment providers and other financial institutions.
The FCA believes the move could make it easier for consumers and businesses to compare price and product features and switch product or provider more easily.
However there are risks over privacy of data and security.
The CfI will launch a discussion on the opportunities and risks arising from Open Finance, what is needed to ensure it develops in the best interests of consumers, and what role the FCA should play.
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 shape 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 set up an advisory group to help drive the debate and strategy forward. The group comprises industry experts, consumer and business representatives, academics and government departments.
The FCA is seeking feedback to the CfI by 17 March and will publish a feedback statement in the summer.
Keith Richards, chief executive of the Personal Finance Society, welcomed the proposals but said the FCA had to give data security a high priority.
He said: “The principle of better engaging consumers in Financial Planning is a welcome development. It is always positive to see the FCA looking at ways to engage consumers with their financial needs.
“It is also fair to say, open finance has the potential to increase the chances of vulnerable consumers not only receiving the appropriate cover they need, but also at an affordable price.
“The FCA needs to take full account of the data security risks of open access, what and who protects data sources at all points along the chain, and to ensure it is a system with in-built mechanisms to provide help and redress, should things wrong.”