The emergence of Open Finance in the UK – CFIT interview

Friday 15 March 2024 08:02 CET | Editor: Raluca Ochiana | Interview

The Paypers sat down with Ezechi Britton, CEO of the Centre for Finance, Innovation, and Technology (CFIT), to discover more about the organisation’s mission to enable Open Finance in the UK.


Please share with us a bit of the CFIT story and your mission.

The Centre for Finance, Innovation, and Technology (CFIT) was launched in 2023. CFIT’s creation was inspired by the 2021 Kalifa UK Fintech Review; with a mission to boost growth in the UK sector and its impact in global markets. 

CFIT will achieve this through removing barriers to growth, clearing a path for the creation of new fintech startups and facilitating the expansion of existing players across the UK.

CFIT’s partnership-driven approach will make the UK the number one destination for fintech startups and scaleups. It will drive better financial outcomes for British consumers and SMEs, provide a blueprint for global financial innovation and upskill people throughout the UK.

Recently, CFIT launched its inaugural report on Open Finance in the UK. What are the primary benefits of Open Finance highlighted in the paper, particularly in terms of improving access to credit for businesses and improving financial advice for consumers?

CFIT’s report explains how Open Finance will positively impact the financial wellbeing of people and SMEs throughout the UK. It demonstrates how CFIT’s Open Finance coalitions drive changes that improve day-to-day financial services, access to finance for SMEs, and business growth. All key factors in the current global economic climate.

For small businesses, our work with HSBC UK showed that over 25% of SME loan applicants who had been referred for manual underwriting and would therefore potentially have failed to receive an offer of credit, could justifiably be given access to finance, with better access to data sets. Significantly improving their access to commercial finance that, in turn, would boost their growth and impact on the UK’s GDP.

How did CFIT collaborate with its extensive network of partners to develop proofs of concept demonstrating the potential of Open Finance, such as the dashboard with Citizens Advice and the pilot analysis with HSBC UK?

The Coalition brought together people from over 60 organisations, representing industry, regulators, and industry groups. All divided into different groups combining skills and responsibilities.

One group developed an SME credit data aggregator to obtain a clearer picture of small businesses and enable increased and better access to finance. Another, working in partnership with Citizens Advice, developed a personal financial health data dashboard that would enable the charity to support many more financially vulnerable consumers. 

These clear proofs of concept have helped to define CFIT’s future focus; built capability, including a consent and authentication model, shown how to optimise and combine data; and built a working infrastructure framework. CFIT will now work with industry to drive this forward to the next stage, based on the working group outputs.

Could you discuss CFIT's recommendations for unlocking growth through Open Finance, including the proposed long-term regulatory framework and the role of the implementation entity?

Our report confirms that boosting financial data sharing and unlocking underutilised data will have a material impact on consumers’ financial outcomes and SME access to finance. 

In the UK, the Joint Regulatory Oversight Committee (JROC) has an extensive programme that will move Open Banking forwards, and we have the opportunity to build on these foundations with Open Finance. CFIT supports the creation of a long-term regulatory framework, based on the Data Protection and Digital Information Bill (DPDI), and the establishment of an appropriate accountable body to bring this to fruition.

What challenges does CFIT anticipate in implementing Open Finance, and how does it plan to address these challenges to ensure successful adoption?

Like any financial innovation, Open Finance comes with its own set of risks, which is why the robust data privacy and security measures of Open Banking must be applied to Open Finance. 

There are hurdles we need to address, for example regulatory hurdles, to ensure consumer protection, data privacy, and security.

Striking the appropriate balance between consumer safeguards and technological innovation is an ongoing process. It requires constant input from industry to avoid new ideas and products being stymied by regulation.

CFIT’s work to date has shone a light on the potential of Open Finance and we will continue to be a consultative partner on the next steps of this work. Moving from proof of concept to prototype and scaling participation and solutions will be crucial to the next phase of Open Finance. 

How does CFIT envision the future of Open Finance in the UK, and what steps is it taking to collaborate further with coalition partners to scale proofs of concept and establish secure data-sharing frameworks? 

CFIT sees Open Finance as a transformative force for the UK financial services sector, and our work to date proves its potential. Moving forward, we will transition Open Finance from proof of concept to tangible prototypes to fully realise its benefits. Additionally, scaling participation will be crucial to unlocking the substantial benefits of wider data sharing, especially in supporting lending to SMEs. To achieve this, we're exploring avenues like leveraging the FCA Regulatory Sandbox and developing new proofs of concept. These initiatives will expand the reach of Open Finance and establish secure data-sharing frameworks prioritising privacy.

Through taking the lead on Open Finance, CFIT will help to establish a future commercial model that incentivises data-sharing and international best practices to drive forward financial innovation. 


About Ezechi Britton

Ezechi Britton MBE is CEO of the Centre for Finance, Innovation, and Technology (CFIT). A serial tech entrepreneur, Ez’s journey has taken him from Software Developer to Co-Founder and CTO, to a Venture Capital Partner. At CFIT, Ez plays an instrumental role in bringing together the financial services industry to together break down barriers and scale financial innovation.



About CFIT

The Centre for Finance, Innovation, and Technology (CFIT) was set up following the Kalifa Review of Fintech to position the United Kingdom as a global leader in financial innovation. CFIT’s purpose is to unblock barriers to growth for financial technology by bringing together the best minds from across the UK to drive better outcomes for consumers and SMEs.

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Keywords: Open Finance, Open Banking, fintech, marketplace, SMEs, regulation, data privacy, data protection, FCA
Categories: Banking & Fintech
Companies: Centre for Finance, Innovation, and Technology
Countries: World
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