CFIT Open Finance coalition publishes recommendations

Ellie Duncan
29 Feb 2024

The Centre for Finance, Innovation and Technology (CFIT) has recommended establishing a body responsible for implementing Open Finance in the UK and creating a “viable” commercial model to incentivise businesses, in its inaugural Open Finance Blueprint report.

CFIT has also published two “proofs of concept” developed by its industry-wide Open Finance coalition, which aim to demonstrate the full potential of the data-sharing technology to deliver benefits to consumers and businesses.

The report, ‘Embracing the UK’s Open Finance Opportunity’, sets out a number of recommendations to “unlock” what is estimated to be £30.5 billion of GDP growth that Open Finance and personal data mobility could provide.

One of these recommendations is the development of an Open Finance roadmap as part of a long-term regulatory framework and an implementation entity, in the mould of Open Banking Limited – formerly the Open Banking Implementation Entity – to deliver on this.

The Open Finance coalition also called for the development of a viable commercial model on the basis that this will “incentivise” UK businesses to securely share financial data, which aligns with the Joint Regulatory Oversight Committee’s work on design principles for a future entity and the findings of the recently published Future of Payments Review.

CFIT launched its first coalition in July last year and chose Open Finance as its focus based on a recommendation from the Kalifa Review.

The CFIT-led coalition comprises more than 60 partners, including Citizens Advice, Experian, EY, the Financial Conduct Authority, FDATA, HSBC, Iwoca, Lloyds Banking Group, Mastercard, Monzo, and Revolut, as well as regional association and industry bodies.

Ezechi Britton

CFIT chief executive officer Ezechi Britton

Ezechi Britton, chief executive officer of CFIT, said there is an “enormous” prize on offer from “getting Open Finance right”.

“For consumers and SMEs, it means more control of your finances and easier access to more affordable credit,” he said.

“For the fintech sector, it is an opportunity for the UK to set global standards and drive growth worldwide. And it dovetails perfectly with the Government’s wider ambition to build a Smart Data economy.”

One of the proofs of concept developed by the coalition is a dashboard produced with Citizens Advice, which showed how enhanced data sharing could provide tailored financial advice to 40% more consumers facing financial difficulties and distress, thereby supporting an additional 150,000 people annually.

The second is a pilot analysis with HSBC UK to demonstrate how, by accessing new datasets and auto-populating business loan applications can lead to a “significant boost” in lending decisions.

Bim Afolami MP

CFIT confirmed that both proofs of concept will be released to the UK fintech and financial services industry to be built into “fully-fledged prototypes”.

Britton added: “Having definitively proven the business case for Open Finance, we’re now looking forward to working with government and industry on furthering the case for unlocking the necessary datasets, scaling the proofs of concept developed by the Coalition, exploring use cases beyond credit and identifying the commercial model and future framework that will encourage secure data-sharing across financial services as we embrace Open Finance.”

Bim Afolami MP, Economic Secretary to the Treasury, said: “I’m delighted to see the progress that CFIT has made in unlocking secure data-sharing across the financial services ecosystem, and excited by the transformational impact this could have over the coming years.

“It’s encouraging to see a broad cross-section of industry and the third sector come together to shape the future of Open Finance.”

Further listening: Taking the lead on Open Finance in the UK – listen to CFIT’s Ezechi Britton on the Open Banking Expo Unplugged podcast.