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The UK Government recently passed the Data (Use and Access) Bill through the House of Parliament. The move is expected to pave the way for the expansion of open banking and smart data sharing, which will affect numerous business sectors.
The legislation marks a key turning point in the expansion of open banking, enabling it to move beyond payments into a more comprehensive open finance model. This would also grant consumers the power to share their data more widely across new use cases in areas such as retail, telecoms, transport, energy, and similar sectors.
This is a broader vision of the future of open banking, which expands the open-data concept beyond the limitations of banks. It is intended to encompass a range of other financial services, including insurance, pensions, investments, and more. For example, insurance companies could offer an overview of existing pension products, or allow users to access loans and deposit data from various banks in a single application.
The Future of Open Banking In The UK Offers Many New Possibilities
The UK Centre for Finance, Innovation, and Technology (CFIT) has already created two functional prototypes of open finance applications designed for vulnerable customers. Through these prototypes, users could receive financial advice that could help speed up credit assessments for SME loan applications.
There are additional use cases that include a simple and quick way to share sensitive information, such as mortgage data, which facilitates the property market, allowing for better deals on utilities and other related services.
Henk Van Hulle, the CEO of Open Banking Limited, commented on the passing of the bill, stating that it represents a landmark moment for the sector. However, he argued that this is still only the beginning. “Now is the time to turn these foundations into real-world outcomes which empower consumers, drive innovation, and unlock growth,” he noted, adding that having the legislative foundations for a smarter, more connected data economy, government, regulators, and industry need to come together to make it all a reality.
He concluded by saying that there will be many important choices to make in the coming months, and that decisions made during that time will frame the type of ecosystem and outcomes that the sector will deliver in the future.
