Open Banking is a great UK success story. This country has played the leading role in its development, born in Britain if you will. Just one measure of success is that our approach has been replicated in well over 60 jurisdictions around the world. Not only a great UK success story but a great UK export.
There are so many illustrations of its power to transform, generating opportunities, stripping out costs, ensuring growth.
It is an excellent example of a right sized regulatory intervention, proving positive for consumer protection, while also delivering for innovation. Far too often these two objectives are posed as polar opposites, as if you can have one but not the other. The truth is, it’s the only way we should consider regulating, holding both the interests of the consumer and the innovator simultaneously as we draft. Difficult? Yes. Doable? Certainly.
We have lost time, unnecessarily, but for the passage of relatively straightforward legislation which could make all the difference to the next critical stages of our Open Banking and Open Finance story.
Lord (Chris) Holmes of Richmond MBE
Colleagues and I had worked for over a year on the Data Protection and Digital Information Bill. Work that we believed was lost at a stroke when, on that otherwise unremarkable Wednesday afternoon, the General Election was called. It was not a perfect Bill, not by any means. One part though which was in very good shape was Part 3, that relating to Smart Data.
So, it was with relief and joy to see the Digital Information and Smart Data Bill included in the recent King’s Speech. We urgently need now to take the next legislative steps and get the Smart Data provisions through parliament. This would not only enable the next phase of Open Banking, but it would also move us forward on the important journey towards Open Finance and the wider Smart Data economy imperative.
What it would also be good to see in this Bill is a clear medium-term roadmap extending Open Banking to Open Finance. It is unclear whether the Bill will include this, but it is essential if we are to make Open Data available in all financial sectors at the very latest by 2030, including credit, savings, mortgages and insurance, enabling citizens to have a real-time, complete picture of their personal balance sheet in one easily accessible place.
The Digital Information and Smart Data Bill speaks to a government that appears to be committed to a medium- to long-term plan extending Smart Data to all possible parts of the UK economy – it is vital that they do commit. By doing this, we can create otherwise unavailable opportunities and value for consumers, businesses and the country alike, by combining financial data with data from other sectors – energy being an obvious example.
It is also imperative to get the infrastructure right, not least, interoperable standards and data exchange, including digital identity verification.
So, the request is straightforward. Ensure that the next phase of Open Banking and a road to Open Finance is included in the Bill and delivered on.
It has the potential to deliver great opportunities, empower individuals, transform communities, and drive economic growth. In short, the smart datafication of our economy provides the opportunity for nothing less than the total transformation of our society for the potential benefit of every citizen.
Delivering the next phase of Open Banking is an open goal for the UK. I urge the Economic Secretary to ensure it is volleyed into the top corner, by using the Digital Information and Smart Data Bill to facilitate a paradigm shift to a Smart Data-enabled economy.
Lord Chris Holmes of Richmond is a Conservative life peer and advisor to Trustly
Lord Chris Holmes is speaking at the Smart Data Show at this year’s Open Banking Expo UK & Europe on 15-16 October in London. Find out more about the speaker line-up and get your ticket here.
