The Open Data Revolution: How It’s Changing the Game for Financial Services

Hey there, folks! The open data revolution is making its way into our lives, and it’s starting with financial services. The recent King’s Speech hinted at a potential game-changer in UK law that could shake things up in a big way. The government is all set to open the door to new technologies through the Data Protection and Digital Information (DPDI) Bill. The goal? To make all kinds of personal data – financial, biographical, demographic, employment, and more – securely shareable within a trustworthy system.

Imagine being able to verify your identity online with the same confidence as using paper documents. In today’s digital world, we do most of our shopping and business online. Now, picture the benefits if we could securely share our personal data with trusted parties, receiving tailored offers instantly based on our specific needs and situations.

The Department for Science, Innovation and Technology estimates that this bill could boost the UK economy by a whopping £4.7 billion over the next decade. In a nutshell, the DPDI bill aims to change the way we see data – as something that can empower consumers rather than just raise privacy concerns.

I’m part of the Centre for Finance, Innovation & Technology, and we’re excited about the potential benefits of enhanced data-sharing in the finance world. We call this subset of open data ‘open finance’. If it takes off, open finance could revolutionize the way we handle our finances, from weekly budgeting to retirement planning.

This could be a game-changer for financial literacy, giving people a detailed understanding of their personal finances instantly and effortlessly. This is especially important at a time when many people are facing increasing living costs and a decline in household income.

Small and medium-sized businesses are also struggling due to the divided nature of the financial services industry. Having a complete picture of their finances could be a game-changer for these businesses, especially in a challenging trading environment.

We believe that open finance could lead the UK’s open data movement for three main reasons. Firstly, financial services make up a significant part of people’s and businesses’ data. Without opening up financial datasets, the UK won’t be able to achieve a modern, digitally connected economy.

Secondly, the government sees the success of open banking as the first step towards unlocking a wider smart data economy. The UK has been a leader in making open banking a reality, and the DPDI bill will build on that success.

Lastly, we’re seeing progress in open finance. The industry is working on how to apply open banking-style data-sharing to financial services more broadly.

We’re bringing the industry together to drive forward open finance, enabling secure sharing of various financial data. By early next year, we’ll be laying out our recommendations for industry and government, which will be part of the UK government’s smart data roadmap.

But, we’re not the only ones in this race. Open data will become a hallmark of sophisticated economies, and there’s a major advantage in being the first to embrace it. If we get open finance right, the rewards are huge. Consumers will have more control over their financial lives, and SMEs will benefit from reduced friction in accessing banking services.

The DPDI bill may seem technical and abstract, but it’s far from it. Open banking paved the way, and now the open finance revolution is the next step towards opening up all other datasets, making the UK a globally competitive, smart data economy.