The UK government believes there is potential for smart data to drive the wider data economy. Specifically, it wants to see similar and interoperable schemes in sectors beyond retail banking to realise a world-leading Smart Data economy. The government argues that this will empower consumers and small business customers, turbo charge competition, innovation, and growth.

The government’s smart data roadmap sets out a cross-government vision for a Smart Data economy, And it contains a set of specific actions it will take to achieve it. It provides commitments and actions for the government to accelerate and coordinate the development of Smart Data schemes

In terms of retail banking, the Treasury will use the Smart Data powers to provide open banking with a long-term regulatory framework by laying secondary regulations.

UK leads globally in promoting open banking

The Centre for Finance, Innovation and Technology (CFIT) has recently published a blueprint for driving Open Finance forward in the UK. This included recommendations for industry and government. The Treasury will carefully consider CFIT’s recommendations, alongside wider industry engagement, as it develops its strategy for Open Finance.

The UK continues to lead the way globally in open banking. To date, over 8 million consumers and businesses have benefitted from it in the UK. The benefits are not limited to individual customers. Some 750,000 SMEs use innovative open banking enabled products and services to manage their money and to make payments.

Open Banking has also been a critical component of the UK’s fintech sector. A survey of 82 UK based fintechs, all active in open banking, found that they have raised £2.2bn since 2010. 92% of this has been raised since the introduction of open banking.

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Open Banking Ltd Chief Executive Henk van Hulle tells RBI what it means for the future of open banking and new smart data schemes.

OBL response to the smart data roadmap

“Open Banking Limited welcomes the announcement of a roadmap to expand the use of smart data into other sectors. Open banking is a critical component of the UK economy, “says van Hulle.

He notes that its adoption in the UK has already added more than £4bn to the economy. It has attracted inward investment and created almost 5,000 highly skilled digital jobs.

“As the government has noted, open banking has highlighted the many opportunities available to consumers and businesses when they control their data. Developing new smart data schemes will accelerate the economic benefits of open banking to other key sectors. These include energy, retail, transport, home-buying and telecoms, further increasing these opportunities.

“We look forward to seeing the Data Protection and Digital Information Bill progress through Parliament. It gives the government formal powers to mandate participation in future smart data schemes via regulations.

“OBL will continue to work with government and regulators, and maintain our active role in the Smart Data Council, to deliver the next phase of open banking in the UK and support the introduction of other smart data schemes.

“We are also keen to see the Smart Data Council further investigate the need for a ‘body’ to ensure that smart data standards are interoperable and consistently applied.

Both regulatory and industry-led initiatives will allow us to build on open banking’s success and develop innovative new propositions that will benefit consumers, businesses and the UK economy alike.”