The Financial Conduct Authority (FCA) has committed to publishing a roadmap for the rollout of Open Finance within a year, in its new five-year strategy launched today (25 March).
The FCA confirmed it expects the “regulatory foundations” for the first Open Finance scheme to be in place by the end of 2027 and said it will prioritise small business lending, “so these engines of growth can better access capital”.
In its five-year strategy, the FCA also reiterated its commitment to prioritising the development of account-to-account payments, “so people have more choice about how they pay”, and to make variable recurring payments (VRP) “a reality”.
It builds on the regulator’s promise made to the Prime Minister and Chancellor in January, that it intends to introduce variable recurring payments (VRP) in 2025 to increase “competition and choice”, and to developing Open Finance.
The FCA’s new strategy, which takes it up to 2030, is focused on four areas, including improving its processes and embracing technology to become more efficient and effective, and supporting “sustained” economic growth in the UK.
It will also work with industry to boost trust, and product innovation, and to ensure the right information is available so that consumers can take financial decisions.
Finally, the FCA has also pledged to fight financial crime, with a focus on “those who seek to use the fact they are regulated to do harm”.
The FCA states in its five-year strategy that as it integrates the PSR and its functions, it will “deliver the National Payments Vision of an innovative, safe and competitive payments sector” and “build on the success of Open Banking and launch Open Finance”.
Nikhil Rathi, chief executive of the FCA, said: “Our last strategy set high standards and bolstered our operational effectiveness. We are committed to going much further, delivering at pace to meet the scale of change we are facing over the next five years.
“This strategy sets out our priorities, how we’ll become more efficient and effective and make the choices that shape the financial system.”
Rathi added: “Our four priorities reinforce one another and we look forward to collaborating with our partners as we become a smarter regulator, support growth, help consumers and fight crime.”
Industry reaction
Charlotte Crosswell, chair of the Centre for Finance, Innovation and Technology (CFIT), said: “As CFIT detailed in our blueprint report on Open Finance published last year, more seamless data-sharing across the financial ecosystem can drive greater choice, lower costs and innovative new products for both consumers and businesses.
“It’s fantastic to see the FCA committing to releasing a roadmap for the roll-out of Open Finance within 12 months – with the creation of a single multi-year Open Finance Roadmap having been one of our report’s key recommendations – and for the regulatory foundations for the first scheme to be in place by the end of 2027.”
She added that the regulator’s focus on small business lending to drive growth also “aligns closely” with the proof of concept built by CFIT’s Open Finance coalition.
Janine Hirt, chief executive officer of Innovate Finance, called the FCA’s new five-year strategy “a milestone” for UK financial services and fintech.
“It recognises the role innovation will play in helping consumers, driving growth, fighting crime and enabling smarter regulation. I am delighted to see innovation woven throughout the strategy,” Hirt said.
She added: “The strategy backs the three strategic priorities we identified in our FinTech Plan for Government last year: a Smart Data revolution and an Open Finance Roadmap, a tech-positive regulator that supports the next generation of innovation, and action to tackle fraud.”
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