" class="no-js "lang="en-US"> Urgent call for UK Government to accelerate Smart Data Reforms for economic growth and global competitiveness
Wednesday, April 17, 2024

Urgent call for UK Government to accelerate Smart Data Reforms for economic growth and global competitiveness

A heavyweight business coalition led by John Penrose MP is calling for the Government to speed up Smart Data reforms, making British exporters more competitive, stimulating investment in UK digital jobs and delivering better deals for consumers to help cut the cost of living too.

Penrose, who was commissioned by Rishi Sunak to recommend improvements to make UK businesses more competitive, is supported by leading businesses calling for Britain’s world-leading digital success in open banking to be rolled out to industries beyond financial services as fast as possible.

Other members of the coalition include NatWest, TISA, Financial Data and Technology Association, The Payments Association, Open Banking Excellence (OBE) alongside fintechs Ozone API and Icebreaker One. Together they have written to Ministers urging them to move faster with already-planned reforms, to prevent UK businesses being overhauled by rival firms in other countries.

Currently, the Data Protection and Digital Information (No.2) Bill includes provisions to introduce Smart Data reforms, but with no guarantees or timetable on how fast the changes will be introduced in each business sector once they become law. But UK business leaders need certainty to begin investment programmes now, and modern digital firms have to move much, much faster than Westminster or Whitehall’s usual pace.

John Penrose, MP for Weston-Super-Mare and author of Sunak-commissioned report on UK competition policy said: “Open banking and smart data are already transforming UK banking, giving us all cheaper and better-value services even if we don’t realise it’s what lies behind the online financial apps and services so many of us are using nowadays. It has become a global UK success story, with British firms and exporters leading the way around the world. But rivals in other countries won’t stand still, so now we’ve got to roll the same success out across the rest of our economy to give us better deals and create world-leading firms in sectors like online retailing or energy too. The good news is that Government has the legislation on the table, but we need firm implementation plans and timetables from Ministers right away, so businesses can get cracking”

Smart Data lets customers safely share data (for example from their online groceries, energy or bank account) to other rival firms to see if they can offer a better deal. The best example of this so far is the open banking reforms introduced by Competition and Markets Authority (CMA) in 2016. It mandated the UK’s nine largest current account providers to allow their customers to safely and securely share their banking data. To date, there are more than seven million regular users of open banking services and the number is growing fast. Smart Data legislation would allow more markets to be ‘opened up’ including the likes of groceries, telecoms and utilities.

Ghela Boskovich, Regional Director, Head of Europe, Financial Data and Technology Association “The singular lesson from the UK Open Banking experience has been the need for proper governance, oversight, and convening of stakeholders that can only be achieved via a coordinating body, an implementation entity. When the UK and Europe embarked on delivering open banking under PSD2, the UK’s unique choice to have a coordinating implementation entity set it apart from its peers. The results of the choice could not be more striking. It is why the UK model has been recognized as the gold standard of best practices, and has been adopted in other countries as open banking, finance, and data are being adopted.”

Chris Michael, Co-Founder and CEO, Ozone API “Smart Data is expected to drive innovation by and investment in tech companies across a number of sectors. More importantly, this should also drive significant, much needed value to personal and business customers.

We have seen from the implementation of Open Banking in the UK and many other markets, including the Middle East and Latin America, that having a well defined standard, a strong mandate and an implementation body is essential to deliver these benefits in a timely manner.

We at Ozone API welcome the addition of this critical subsection, which will enable further development on the foundations we already have in the UK so there is interoperability and economies of scale across all sectors.”

Tony Craddock, Director General, The Payments Association ‘It’s only by setting standards that can be used across sectors that we can capitalise on our leadership in open banking. The proposed changes to the Bill will make sure a common data standard is adopted within a realistic timeframe and are essential components of a market leading strategy’.

Helen Child, Founder, Open Banking Excellence (OBE) – “As we transition from Open Banking into Open Finance, John Penrose’s amendment and the Bill itself perfectly position the UK to consolidate its global leadership position in Open Banking. They will enable the UK to lead crucial global industry conversations around standards and interoperability, as well as delivering important benefits to our economy and society.

“The UK set a blueprint for Open Banking which many countries around the world built upon. Now, we are at a crossroads. If government and regulators do not take the correct action, we risk losing our hard-won global leadership position.

“The Bill lays the foundations for an infrastructure which will change the way we live our lives and manage our finances in the UK. I urge everyone in the ecosystem to support John Penrose’s amendment to this Bill, which will genuinely help us stay at the front of the global race as we unlock the possibilities of Open Finance.”

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