The U.K.’s Financial Conduct Authority (FCA) is consulting on its vision for expanding beyond “open banking” to “open finance” — enabling consumers and small businesses to more easily share their financial data, with a view to facilitating financial industry innovation.
The FCA, which is working with the HM Treasury to develop a regulatory framework for open finance by the end of 2027, published a paper on Monday setting out its plans to build on the existing regime for open banking by giving consumers and businesses greater control over their financial data, and enabling industry firms to access that data to develop more customized products and services.
To start, this year, the regulator intends to prioritize test cases that aim to help small and medium-sized enterprises secure greater access to credit, and to help consumers get mortgages.
“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.
In 2027, the FCA aims to develop a long-term regulatory framework based on the experience with initial tests that take place this year. And, between 2028 and 2030, it will work with the industry to launch “sustainable open finance schemes with clear governance, high standards of consumer protection and interoperability.”
“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 customized support — while fuelling innovation, competition and supporting economic growth,” said David Geale, executive director for payments and digital finance at the FCA, in a release.
Additionally, the regulator suggested that the development of an open finance regime will facilitate greater use of AI within the industry.
“By unlocking high-quality data in a way that secures consumer trust, open finance can be a foundation for widespread adoption of agentic AI,” said Adam Jackson, chief strategy officer at fintech trade group Innovate Finance, in a release.
“We support collaboration between industry and the FCA to deliver the roadmap at pace, enabling agreement on priority use cases and datasets, and appropriate regulatory action to open these up to competition and innovation.”