Thought Leadership

‘Smart Data: Unleashing the full potential of open banking’ – event round-up

23 February 2024

At OBL’s recent Parliamentary roadshow, MPs, peers, regulators, civil servants and members of the open banking ecosystem gathered to explore how smart data can be used to deliver the benefits of open banking across key sectors of the UK economy.

It also provided a chance for attendees to meet some of the shortlisted companies for the Department of Business and Trade’s Smart Data Challenge Prize. The challenge has called for ideas on cross-sector use case that harness data from one or more of the following five sectors: energy, financial services, home-buying, retail and transport.

The event included a panel conversation, chaired by John Penrose MP, on the future of open banking and its evolution into smart data. The Data Protection and Digital Information (DPDI) Bill was also a key topic as it will enable the creation of smart data schemes and help kickstart the Government’s  ‘Smart Data Big Bang’. This aims to see the expansions of open banking data to seven additional economic sectors, the five listed above, along with banking and telecoms.

The panel comprised:

  • Kevin Hollinrake MP – Minister for Enterprise, Markets and Small Business
  • Marion King – Chair and Trustee of Open Banking Limited
  • Charlotte Crosswell – Chair of the Centre for Finance, Innovation and Technology (CFIT)
  • Stephen Wright – Head of Regulation and Standards, Bank of APIs at NatWest

Launching the discussion, Penrose commented on the status of the DPDI Bill, expressing optimism that, when the Bill is given a date for the Committee stage in the House of Lords, it will pass with cross-party support. However, Penrose pointed out that while open banking is in a good place in the UK, “we can’t afford to sit still”.

We need “an investable timetable” of the rollout of smart data sectors, and for a central standards-setting body.

John Penrose, Conservative MP for Weston-super-Mare

Counting 9m+ active users

King celebrated the successes open banking has had in its first six years, announcing the latest adoption and payment statistics: 9 million active users and 14.45 million open banking payments made in January 2024. She paid tribute to the efforts of the ecosystem to get this far, citing it as an example of collaboration in action among a large group of industry stakeholders.

However, she added that OBL is now planning for transition that will take us beyond the [CMA] Order and help to unlock the full potential for open banking.

Charlotte Crosswell and Stephen Wright cast their eyes beyond the next step and focused on the long-term development of a smart data economy. Both highlighted the urgency in setting data standards to enable the ecosystem to innovate and open up the economy.

The UK still has a tremendous opportunity to lead some of this innovation and send the open banking providers here out into the world and take our scientists out into the world. But let’s get there quicker”.

Charlotte Crosswell, CFIT Chair

Crosswell added that it is data that will “unlock better outcomes for consumers and SMEs”.

Minister Kevin Hollinrake was confident that the Government would progress the DPDI Bill and fulfil its potential by implementing smart data schemes. To achieve this, Hollinrake made clear the system must be interoperable, a point King was also keen to press. Yet alongside this, he also made it clear he wanted to see HMT move more quickly on legislating for smart data.

International competition

A recurrent theme for the panel was the importance of the UK maintaining its lead in open banking, and setting data standards on the international stage. Penrose asked the panel to name the countries they perceived as the biggest threats.

The US, with its sizeable internal market, is rapidly catching up with the UK, with the country’s Consumer Financial Protection Bureau legislating for the acceleration of open banking to an audience of 150 million people. The panel also cited emerging markets such as Brazil and India, which are beginning to collaborate on cross-border data standards. Any one of these countries has the potential to become the global standard for data sharing, and as Crosswell pointed out, “no one is stopping at borders”.

In order for the UK to maintain its strong lead in smart data, Wright and Crosswell were adamant that a future roadmap should be led by industry, taking a use case approach guiding the way to a smart data economy.

Hollinrake made the case that it was the Government’s role to liberate the data to “drive down prices and drive up service”, then step back and enable competition within the ecosystem to drive further innovation.

King agreed with the Minister, stating that the future entity will help facilitate the liberation and interoperability of data, to allow innovation among the ecosystem to flourish.

It’s clear that, despite lingering concerns about the Joint Regulatory Oversight Committee’s (JROC’s) pace of progress on the future entity, and the temporary pause in legislation, the industry’s ambition, appetite and ability to deliver wider economic growth remains undiminished. The shortlisted start-ups in the room were evidence that the UK is well on its way towards a smart data economy. Indeed, the DBT estimates that commercial opportunities created by personal data mobility have the potential to increase GDP by £28bn. That’s a prize worth waiting for.