The Financial Conduct Authority has issued a call for input on the opportunities and risks presented by open finance in financial services.
Open finance builds on the principles of open banking – the sharing of data, which provides new ways for customers and businesses to make the most of their money.
Executive director of strategy and competition at the FCA, Christopher Woolard said: “Data and technology are increasingly driving changes in financial markets. As a regulator, we need to understand how this change will shape markets and shape regulation in the future.
“We want to understand how open finance can develop to best meet consumers’ needs and enhance competition in the interests of consumers. We also want to understand what role we should play in supporting it,” he added.
Chief executive of the Personal Finance Society, Keith Richards commented: “The principle of better engaging consumers in financial planning is a welcome development. It is always positive to see the FCA looking at ways to engage consumers with their financial needs.
“It is also fair to say, open finance has the potential to increase the chances of vulnerable consumers not only receiving the appropriate cover they need but also at an affordable price,” he added.
“The right values and regulatory regime for open finance needs to be created and presented to organisations and consumers alike. This will ensure that they can enjoy the benefits of a fair and equal exchange of information. The FCA needs to take full account of the data security risks of open access, what and who protects data sources at all points along the chain, and to ensure it is a system with in-built mechanisms to provide help and redress, should things wrong.”
The FCA is seeking feedback by 17th March 2020 and will publish a feedback statement in summer 2020.
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