FCA seeks input on Open Finance future

The Financial Conduct Authority (FCA) has today launched a call for input on the opportunities presented by so-called ‘Open Finance’.

As it explained, this builds on the principles of Open Banking - the sharing of data which provides new ways for customers and businesses to make the most of their money - extending them to a wider range of products.

By making it easier for consumers and businesses to compare price and product features and switch product or provider, Open Finance could be beneficial in the general insurance, cash savings and mortgage markets, stated the FCA. It could help widen access to advice and support, boost efficiencies for businesses and access to credit, and spur innovation.

The call for input is aimed at launching 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 regulator 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 forward its future strategy. The advice of this group, which comprises industry experts, consumer and business representatives, academics and government departments, has also been published today.

Over the coming months, the group will consider how Open Finance will develop barriers to its development, and the ethical and practical issues around data sharing.

Sheldon Mills, chair of the group and director of competition at the FCA, said: "Open Finance has the potential to revolutionise the way financial markets work for consumers, delivering significant consumer benefits, improving competition within financial services sectors and spurring greater innovation.

"We want to ensure that open finance develops in the interest of consumers and competition - establishing the advisory group will help us achieve this."

At a conference last month, Mills said that the regulator’s role needed to balance to consumer benefits of Open Finance with the potential risks it opens up for data privacy and competition in the market, and that the concept could also extend the “role of transparency in data usage, storage, and portability which could unlock benefits for users and providers”.

The FCA is seeking feedback to the call for input by 17 March 2020 and will publish a feedback statement in summer 2020.

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