CFIT offers recommendations on UK Open Finance

Thursday 29 February 2024 09:30 CET | News

The Centre for Finance, Innovation, and Technology (CFIT) has published a report detailing the benefits that Open Finance can deliver for UK consumers and businesses.


CFIT’s report on Khalifa Review shows how better data-sharing in the context of Open Finance can provide improved access to credit for companies and swifter, more effective financial advice for consumers.

A CFIT-led coalition of more than 60 partners – including Citizens Advice, Experian, EY, the FCA, FDATA, HSBC, IBM, Iwoca, KPMG, Lloyds Banking Group, Mastercard, Monzo, Revolut, and various regional association and industry bodies – worked together to develop new solutions unblocking barriers to secure data-sharing across the financial services industry.


The Centre for Finance, Innovation, and Technology (CFIT) has published a report detailing the benefits that Open Finance can deliver for UK consumers and businesses.


Proof of concepts demonstrating applications of Open Finance

Alongside a strategy for the future of Open Finance, which allows consumers and SMEs to access and share a wider range of their financial data, CFIT now publishes two ‘proofs of concept’ developed by the coalition that show the full potential of this technology.

The first proof of concept is a dashboard produced with Citizens Advice, which has shown how enhanced data-sharing could provide tailored financial advice to 40% more consumers facing financial difficulties and distress – supporting an extra 150,000 people annually. This sets out how Citizens Advice clients could choose to seamlessly share financial data with the charity, freeing advisors from lengthy data collection and analysis, and giving them more time to offer advice.

The second successful pilot analysis with HSBC UK showed that Open Finance could deliver more lending to SMEs. It demonstrated that accessing new datasets and auto-populating business loan applications can lead to a significant boost in lending decisions. The exercise suggested that over a quarter of businesses in a sample of SMEs whose loan applications had been referred for manual underwriting, and who risked missing out on credit, could be given access to finance, had Open Finance been in place. The work – which used synthetic data and profiles of SMEs based on HSBC business customers – also showed that embracing Open Finance could lead to a fall in the number of businesses that give up on applications before they are complete.

These proofs of concept will now be released to the UK fintech and financial services industry to be built into fully fledged prototypes. The publication also delivers the new partnerships and blueprint for Open Finance previously called for by the Kalifa Review of UK Fintech.


Recommendation for unlocking growth through Open Finance

CFIT – a body created in 2023 on the recommendation of the Kalifa Review – sets out a series of recommendations to unlock the estimated GBP 30.5 billion of GDP growth that Open Finance and personal data mobility could provide. These include the development of an Open Finance roadmap as part of a long-term regulatory framework, as well as an implementation entity empowered to drive this work forward, which could be modelled on the successful model of Open Banking in the UK, led by Open Banking (OBL - formerly OBIE). The Joint Regulatory Oversight Committee and OBL will be setting out their plans, including a proposal for a new implementation entity to deliver non-CMA Order work, and a vision for the future delivery of Open Banking and beyond at the end of Q1 2024.


Other recommendations within the Coalition’s report include:

  • Setting up a taskforce to build on the Coalition’s work in prioritising other ways that Open Finance can deliver better outcomes for businesses and consumers beyond credit. Other potential use cases identified include retirement and pensions, savings and investments, Digital ID and cash flow management;

  • The development of a viable commercial model to incentivise businesses to securely share financial data, echoing JROC’s work on design principles for a future entity and the recently published Future of Payments Review.


CFIT executives highlighted the significant benefits of Open Finance, including increased financial control for consumers and SMEs, global growth opportunities for the fintech sector, and alignment with the UK government's Smart Data economy goals. They thanked coalition partners for their work and expressed readiness to collaborate further on scaling proofs of concept and establishing a framework for secure data-sharing.

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Keywords: Open Finance, Open Banking, data sharing, financial inclusion, financing , lending
Categories: Banking & Fintech
Companies: Centre for Finance, Innovation, and Technology
Countries: United Kingdom
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