CFIT Launches Open Finance Initiatives for Consumer, SME Benefit

London, 17 April 2024 – Leading retail banks, credit agencies, fintech firms and Citizens Advice are uniting to revolutionise access to finance in the UK, based on recommendations put forward earlier this year by the Centre for Finance, Innovation and Technology (CFIT).

Today, CFIT has announced two trial initiatives, following key recommendations set out in its Open Finance Blueprint Report and building on the ‘proofs of concept’ developed by its industry-wide coalition. These will provide better financial outcomes for vulnerable consumers and make access to finance quicker and easier for SMEs that are facing a £22bn funding gap.

By scaling the existing ‘proofs of concept’ into working prototypes, these initiatives will serve as a pre-cursor to the broader adoption of Open Finance across the UK’s financial services sector in the future, to drive economic growth and erode some of the obstacles facing consumers in accessing finance.

The initiatives in detail:

  1. Citizens Advice (CA) and CFIT will deliver initial industry-driven pilots, with Experian in CA Stoke and North Tyneside, in addition to the CA pilots already completed by Aperidata and PayPoint in CA SORT (Stockport, Oldham, Rochdale, Trafford). These pilots will enhance the help available to vulnerable consumers by empowering CA teams to speedily and securely access financial data, with a client’s consent, and advise on their critical financial needs. In practice, this will significantly boost CA’s capacity and capability to deliver help to greater numbers of vulnerable people.

CA has further centres that are ready to pilot this technology and is actively seeking support from the financial services sector to put these in place. By coalescing delivery partners such as Credit Canary, CRIF, and Direct ID, with support from potential funders, such as Barclays, CFIT hopes to help CA to roll out this Open Finance solution across all its centres, improving productivity and the services that it can offer with available resources.

This initiative builds on the dashboard previously produced by CFIT with Citizens Advice to demonstrate how allowing CA clients to seamlessly share their financial data could provide tailored financial advice to 40% more consumers facing financial difficulties and distress – supporting an extra 150,000 people annually.

  1. SME lenders, including Barclays, will design and implement Open Finance solutions that will accelerate SME credit assessment and loan decision-making. This initiative builds on the successful pilot analysis with HSBC and other CFIT partners including IBM and CRIF, which demonstrated that accessing new datasets and auto-populating business loan applications can lead to a significant boost in lending decisions.

Research estimates that a £22bn funding gap prevents SMEs from being able to invest, innovate and improve their firms. CFIT recognises the key role played by SMEs in securing UK economic growth, employment and export opportunities.

Commenting on CFIT’s progress update, CEO Ezechi Britton MBE, said: “CFIT launched in 2023 with a mission to enhance the UK’s fintech sector and deliver benefits for consumers and SMEs – and the entire economy. I am pleased to say that we are delivering on this mission by creating industry-led partnerships that take Open Finance proofs of concept and turn them into working prototypes in selected areas of the UK. Together with Government, industry, regulators and academic institutions, we are ensuring that Britain’s financial services sector continues to lead the way and be the envy of the world.”

Commenting on Barclays Bank’s role on the CFIT Taskforce, Jason Turner, Director of Open Banking, said: “The environment in which businesses and consumers operate is rapidly changing, and cross-industry technology will play a vital role in meeting their evolving needs. We are delighted to partner with CFIT and the wider industry to explore Open Financing solutions, with the goal of providing enhanced services for our customers.”

Commenting on Citizens Advice’s role in the consumer programme, Strategy Lead, Jake Beavan, said: “CFIT has been instrumental in creating programmes that will enable CA to deliver quality services with a greater frequency to vulnerable consumers. The adoption of the Open Finance proof of concept and cooperation of industry partners will enable CA to achieve a quick and incisive solution to the issues faced by consumers. I look forward to the success of the initial pilot projects and to these becoming available throughout our national network.”

Commenting on HSBC’s role in the SME programme, Head of Strategic Growth, Partnership and Innovation, UK Commercial Banking, Will Turner, said: “HSBC recognises the vital role played by SMEs across the UK economy, both in the creation of jobs and upskilling of our workforce. That is why we backed CFIT’s coalition programme and remain committed to furthering Open Finance initiatives that will enable better decision-making and customer experiences for qualified SMEs.”