Open Finance

Identifying challenges and finding innovative
solutions to unlock the potential of Open Finance

Our Open Finance Blueprint​

CFIT’s inaugural Open Finance coalition was joined by more than 60 organisations from across industry, including a wide range of ecosystem stakeholders. From prioritising use cases and data sets to building scaleable proofs on concept, the coalition demonstrated that Open Finance can create better outcomes for UK consumers and small and medium-sized enterprises (SMEs).

The Open Finance Blueprint summarises the opportunities identified by the coalition and the proofs of concept developed. It also sets out key findings and recommendations to drive forward Open Finance in the UK.

Download a copy of the Open Finance Blueprint

Our Key Findings

1. More SME lending

Substantially more lending would be made to small businesses if specific additional datasets were to be made widely available to CRAs and small business lenders (both established and new entrants). Our work suggested over 25% of SME loan applicants who had been referred for manual underwriting and would potentially have failed to receive an offer of credit, could justifiably be given access to finance.

2. More vulnerable consumers supported

By increasing the automation of manual processes, debt advice agencies would be able to support more people in dealing with financial problems. Our proof of concept indicated that enhanced data sharing could provide up to an extra 150,000 consumers annually with tailored financial advice and help some of our most vulnerable citizens out of financial struggles and debt traps.

3. Power of working together

By bringing the right people together from industry, regulators and elsewhere under an umbrella such as CFIT, ideas can be turned into viable proofs of concept that could, if implemented, make a positive difference to consumers and businesses.

4. Positive impact on UK economy

Research has found that delivering Open Finance and personal data mobility could boost UK GDP by £30.5bn[i].

5. Making Open Finance simple

By bringing customer consents and authentications together in one place, Open Finance-enabled solutions are more accessible to all potential users, reducing dropout rates and further delivering benefits to consumers and small businesses.

Our Key Recommendations

Our work to date has shone a light on the potential of Open Finance. This section sets out how we can take the next steps to turn our proofs of concept into models that can be applied by organisations to realise the benefits of Open Finance for consumers and SMEs. 

 

  1. Develop SME proof of concept further

Broader financial data sharing can improve lending outcomes for SMEs. It is important that the industry continues to build on the work of the coalition to extend the proof of concept and develop plans for a full prototype.​​

  1. Develop vulnerable customer proof of concept into a full working prototype

By increasing the automation of manual processes, debt advice agencies would be able to support more people, including consumers in vulnerable circumstances, in dealing with financial problems. We are exploring ways to advance our proof of concept into a full working prototype.​​

  1. Identify a commercially viable approach to incentivise participants to share financial data

Without a regulatory requirement to make data available, Open Finance data sharing will only take place if incentives are aligned between data holders and data users (or data brokers). We are keen to bring ecosystem stakeholders together and collaborate on developing principles that would underpin commercially viable data-sharing arrangements.​​

  1. Empower an accountable body to advance the Open Finance agenda

Having an accountable body focused on managing the implementation of Open Banking has been a significant contributor to the UK’s success. We consider that a suitably empowered accountable body will be needed to steward the development, implementation, and stewardship of UK Open Finance.​​

  1. Set up consent and authentication working group

The coalition has demonstrated the benefits of bringing an individual’s consents together into one place. However, people still need to sign in separately to multiple data providers. We recognise that there is already significant work being undertaken in other government departments. Therefore, we consider that the most appropriate way to move this forward is to create a working group which can provide coordinated input into existing initiatives.

  1. Establish a task force to prioritise the development of Open Finance APIs to run in parallel to the current Open Banking JROC workstreams

Open Finance can only be delivered if it is broken down into achievable pieces of work. The recommendations outlined above should be put together with other known deliverables, such as those emerging from JROC’s workstreams, into a single multi-year Open Finance Roadmap. As part of this Open Finance Roadmap, we recommend the setting up of a task force to build on the foundational work in prioritising use cases and required data sets and to determine the APIs that will be needed to enable implementation.

 

Our Selected Use Cases

The coalition has made significant progress in identifying the potential benefits of Open Finance, how to unlock data to make Open Finance a reality, and the challenges that remain. In particular, the coalition focused on two use cases to validate the potential benefits of opening up data sets in improving consumers and SMEs’ access to products that meet their needs.​

Supporting vulnerable consumers
Enabling individuals who are financially distressed to receive timely and tailored debt advice through secure data sharing under their explicit consent. This proof of concept is developed with particular input from our partners, Citizens Advice, DirectID and Experian.​
Our Impact

By automating manual processes, debt advice agencies would be able to support more people out of financial struggles and debt traps, including some of our most vulnerable citizens.

Through enhanced data sharing, Citizens Advice estimates that their advisers could assist up to additional 150,000 clients annually, reflecting over 40% increase in advisors’ capacity. In turn, for those who Citizens Advice have helped, they stand to gain on average an additional £1,000 a year. 

Our proof of concept also provides the foundational thinking to develop a separate self-help tool, which will complement the adviser support model. If just 20% of visitors to the Citizens Advice debt web pages made use of this automated and data driven self-help tool, that would mean one million more people a year getting help with their financial picture.

Access to finance for SMEs
Supporting SMEs to develop a holistic credit profile by aggregating different data sources. This proof of concept was supported with particular input from our partners such as the Financial Conduct Authority, IBM, Datavillage, Experian and HSBC.​
Our Impact

UK SMEs stand to significantly increase their access to lending if streamlined access to specific additional data sets, such as HMRC and Companies House data, are implemented. 

In a successful pilot analysis with HSBC UK, leveraging Open Finance data sets allowed over a quarter of businesses from a representative sample of SMEs in HSBC’s portfolio, to now receive a credit offer without human referral.

The study also revealed that over half of the SME sample that dropped out of the application process could have received a credit decision if they completed the journey with enhanced data sets.

Learn more about our proofs of concept and technical resources

Find out more

The Coalition’s Vision

Open Finance Coalition enabled collaboration between fintechs, academics, banks, regulators, and others.

Our aim is to build mutual trust and foster a sharing of data that can build the crucial datasets needed to unlock innovation and scalability across the financial technology sector.

What is Open Finance?

Open Finance represents the next phase in the evolution of financial services innovation, building upon the foundation established by Open Banking. While Open Banking introduced the concept of securely sharing customer data with trusted third parties, Open Finance takes this concept to new heights. It expands the scope beyond transactional data, encompassing a broader range of financial information such as savings, pensions, investments, insurance, mortgages, and other crucial aspects of personal finance.

By enabling people and businesses to view all their financial information in one place, Open Finance offers a greater understanding and control of their financial lives. Customers can access a comprehensive view of their financial position, enabling them to make more informed decisions and unlock a host of innovative services tailored to their specific needs. Third-party providers, armed with a wider array of data, can deliver personalised solutions that go beyond traditional banking offerings, revolutionising how individuals manage their finances and interact with financial products and services.

Why we chose Open Finance as our inaugural coalition

Open Finance represents a significant shift towards a more interconnected and inclusive financial ecosystem. It fosters competition, encourages innovation, and empowers consumers by giving them the freedom to securely share their data with innovative providers who can offer personalised solutions and improved financial experiences.

At CFIT, we recognise the transformative potential of Open Finance and are committed to driving its adoption and advancement. Through our collaborative efforts, we aim to shape the future of finance, ensuring that Open Finance becomes a catalyst for positive change and delivers tangible benefits to individuals, businesses, and the financial industry as a whole.

Open Finance Partners

Our esteemed CFIT Coalition Partners are at the forefront of driving innovation in Open Finance. Together, we are unlocking the vast potential of this transformative concept and reshaping the future of the financial industry.

Our Open Finance Working Group Members

Our dedicated and diverse group of Working Group Members plays a crucial role in shaping the future of Open Finance. With their expertise, passion, and collaborative spirit, we are driving meaningful change and pioneering innovative solutions within the financial landscape. Together, we are unlocking new possibilities and creating tangible outcomes that propel the adoption and advancement of Open Finance. 

Supporters and Contributors

Open Finance Coalition Meeting Minutes

Find below CFIT’s Open Finance meeting minutes and discover more on our work to unlock the potential of Open Finance for the UK economy.

First Coalition Partner meeting minutes Friday, 21 July 2023

Mission Control Minutes 24 August 2023

Mission Control Minutes 21 September 2023

Mission Control Minutes 19 October 2023

Mission Control Minutes 16 November 2023

Mission Control Minutes 14 December 2023

Read our Open Finance Blueprint or find out more about our proofs of concept

Download Open Finance Blueprint Proofs of concept