Ministers offer open banking boost with ‘smart data’ investment
Ministers threw their weight behind the roll out of open banking technology yesterday as they confirmed a funding injection in the development of so-called ‘smart data’ in financial services.
Open banking was introduced in 2018 to free up data sharing and drive competition in finance, and the technology has been touted by fintechs as essential to driving innovation in the sector. Fintech firms have been pushing for an acceleration of smart data sharing as key to the next stage of the technology’s development.
In a speech at the Innovate Finance Global Summit yesterday evening, business secretary Kwasi Kwarteng said building smart data was a “top priority” and he was looking to invest in the rollout in the coming months.
“I can confirm that my public base is also investing in smart data over this spending review period,” he told the conference.
“We’re setting up a Smart Data Council which will be brought together to build an ecosystem and really knock heads together to drive collaboration with industry across sectors, and to provide timely advice to government.”
Kwarteng’s comments came as city minister John Glen praised the role of the technology in underpinning innovation in financial services earlier in the day.
Fintech firms have been pushing ministers and regulators for a quicker roll out of the technology and last month accused the competition and markets authority of dragging its feet on a number of key decisions.
The watchdog has now ceded control of the rollout to an oversight body made up of a number of different regulators which will be tasked of pushing it through to the next stage of development.
The boss of the independent body set up to oversee open banking development said the ministers’ comments were a positive step.
“We welcome the latest announcements by City Minister, John Glen, and Business Secretary, Kwasi Kwarteng, on taking open banking to the next phase through the establishment of the Joint Regulatory Oversight Committee, and the increased collaboration with industry including the funding and support for future smart data initiatives,” Charlotte Crosswell, Chair and Trustee, OBIE told CityAM
“As we move towards a new regulatory framework for open banking and smart data, it is vital to have a firm legal basis, providing certainty to industry and protection to end users.”
Crosswell said that the government must make the delivery of smart data legislation a priority in the next session of Parliament in order to “unlock the benefits of competition, innovation and empowering consumers in other sectors.”