The Coalition for a Digital Economy (Coadec) has advised that the UK government and regulators take a new approach to Open Finance.

Coadec has published a report that calls for regulators to “end their overly-standardised” process and instead take an “Australia-style, market-led” approach to Open Finance.

The report says that the UK can achieve an open digital financial services marketplace within two years with the establishment of a consumer data right, and with the help of API platforms.

According to Coadec, the Australian government has taken this approach and has introduced “arguably the most expansive open data regulatory initiative in the world.”

The coalition has said that with the EU recently committing to having an open finance framework in place by 2024, the UK must move quickly to “defend its FinTech crown.”

The report comes as the Government and regulators embark on a number of ambitious reviews in 2020, including on modernising payments regulations, open finance and the broader UK FinTech strategy.

The report outlines four recommendations to ensure a successful Open Finance strategy in the UK:

1. The Government must grant consumers a new data sharing right that empowers them to own and share their financial data once again.

2. The Government must remove the 90-day re-authentication rule.

3. The FCA must pursue a market-led, principles-based regulatory framework for Open Finance.

4. The quick wins for Open Finance will be in the savings, credit, mortgages and pensions markets, and the FCA must make these the first sectors to open up their data first to consumers via open source APIs.

Joel Gladwin, head of policy at Coadec, said: “Open Banking has shown that when the consumer is in control of their data and who they share it with, this can build trust, drive engagement and empower activity.

“But the banks were able to send armies of slick lobbyists and magic circle lawyers to Brussels to build extra barriers to FinTechs and maintain their gatekeeper roles.”

He added: “By granting consumers a new data sharing right and encouraging a market of API specialists to compete in building the plumbing for Open Finance, banks will have very little room for manoeuvre this time. Ultimately, this will allow consumers to access better, and more tailored, financial services than they do currently.”

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