Context
The FCA has announced a partnership to accelerate delivery of open finance. Open finance refers to the secure sharing of financial data across various sectors, including banking, loans, payments, and insurance. It builds on principles of open banking, aiming to break down data silos within the financial system, to empower consumers and foster innovation in financial services.
In its letter to the Prime Minister in January, the FCA committed to completing work designed to help accelerate digital innovation which included developing open finance, potentially prioritising small and medium-sized enterprise (SME) lending. To support this work, ahead of launching the open finance roadmap and strategy, the FCA has announced a new partnership and is launching two TechSprints.
Key points to note and next actions
The FCA asked KPMG and Europe Economics to carry out pieces of work on the benefits open banking and open finance could bring for consumers and the wider financial services sector.
Open banking has laid important groundwork to make everyday banking and payments more diverse and accessible. Open finance has the potential to extend this to more financial services products and services. The report acknowledges there would be trade-offs regulators need to consider to balance the benefits and risks. These include data sharing arrangements, having the right technology in place to do so and systems and procedures that encourage innovation while ensuring consumers remain protected.
In September the FCA launched Smart Data Accelerator. This is an extension of the sandbox which will allow the testing of real uses of open finance in practice. The FCA is collaborating with RaidiamLink to use their testing environment which will allow firms participating in the Smart Data Accelerator to simulate and test data sharing. With this, firms will be able to develop smart data solutions that are safe, secure, and designed to benefit people and communities.
The FCA is running two sprints between 17 November 2025 and 12 February 2026. One will focus on mortgages, and the other on finance for SMEs.