The Financial Conduct Authority has outlined its vision for open finance, in a move that could allow consumers and businesses greater control over their financial data to secure better deals.
The regulator said open finance would enable people and businesses to share their financial data securely with a range of financial services providers, helping them access mortgages, investments, savings and pensions.
This will give financial services firms a more complete picture of consumers’ and businesses’ finances, enabling more personalised and inclusive services, alongside more competitive pricing and stronger fraud protection.
The FCA will initially prioritise exploring how open finance can help SMEs improve access to credit and speed up loan applications. It also plans to examine how open finance can help consumers manage and improve access to mortgages.
David Geale, executive director of payments and digital finance at the FCA, said: “Open finance has the potential to transform how people interact with financial services. By giving consumers and businesses more control over their own financial data, we can help them access credit, secure better deals and receive more customised support – while fuelling innovation, competition and supporting economic growth.”
The FCA said it will work with industry, consumer groups and fellow regulators this year through its Smart Data Accelerator and PRISM taskforce to develop a range of open finance use cases.
It will also work with HM Treasury on options for a regulatory framework by the end of 2027. Firms which are already able to access data and have appropriate permissions in place will be supported to introduce open finance products sooner, it said.
Damien Burke, head of regulatory practice at Broadstone, said: “Open finance has the potential to transform how consumers access financial services and it is energising to see the FCA accelerating these plans.
“Leveraging this technology can create a market that enables institutions to have a clearer view of the consumers they support and drive economic growth via further innovation in the UK’s dynamic financial services sector.
“By enabling lenders to access a more complete, real-time view of a borrower’s financial position, including income patterns, spending behaviour and existing liabilities, affordability assessments can become far more accurate.
“This should help move the market away from blunt, one-size-fits-all criteria towards more tailored lending decisions that reflect how people actually earn and manage money today, particularly those with non-traditional or variable incomes.”
Burke said for consumers, it could mean more realistic borrowing limits and better-matched products, while creating an opportunity for lenders to design more flexible solutions.
“The success of open finance in the mortgage market will depend on how effectively lenders embed these insights into underwriting processes while maintaining robust risk controls. If implemented well, it could support a more inclusive lending environment that balances innovation with responsible affordability,” he added.
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