FCA outlines new open finance measures

The Financial Conduct Authority (FCA) has outlined new measures that aim to give consumers and businesses greater control over their financial data to help secure better deals.

The FCA says that open finance will unlock the potential for people and businesses to share their financial data securely with a range of financial services providers, helping them access mortgages, investments, savings and pensions. This will give financial services firms a more complete picture of consumers’ and businesses’ finances, enabling more personalised and inclusive services, alongside more competitive pricing and stronger fraud protection.

The FCA will prioritise exploring how open finance can help SMEs improve access to credit and speed up loan applications. It will also examine how open finance can help consumers manage and improve access to mortgages.

To progress plans as quickly as possible, the FCA will engage with industry, consumer groups and fellow regulators this year to develop a range of practical open finance use cases. This will be done through the FCA’s Smart Data Accelerator and PRISM (Prioritisation and Real-world Insights Selection Matrix) Taskforce.

David Geale, Executive Director of Payments and Digital Finance at the FCA, said  “Open finance has the potential to transform how people interact with financial services. By giving consumers and businesses more control over their own financial data, we can help them access credit, secure better deals and receive more customised support – while fuelling innovation, competition and supporting economic growth.”

Adam Jackson, Chief Strategy Officer at Innovate Finance, said “Just as open banking has sparked the growth of many UK fintechs, so open finance can power a new wave of innovation. By unlocking high-quality data in a way that secures consumer trust, open finance can be a foundation for widespread adoption of agentic AI. We support collaboration between industry and the FCA to deliver the roadmap at pace, enabling agreement on priority use cases and datasets, and appropriate regulatory action to open these up to competition and innovation.”

The FCA will work with HM Treasury on options for a regulatory framework for open finance by the end of 2027. Firms will be supported to introduce open finance products sooner, where they are already able to access data and appropriate permissions are in place.

Kate Pender, CEO of Fair4All Finance said “Open finance presents an incredible opportunity to break down barriers to accessing credit, allowing more people to get access to the products they need. We have seen significant use of open banking within the credit union and CDFI markets, where they increasingly look at people on the whole, moving away from the singular view of a credit score. Evidence from lender Salad Money on their use of open banking has already shown that it is more inclusive and allows them to better serve customers in a more holistic way. This means that lenders can take better informed decisions on whether to lend to someone, increasing access and reducing friction.

“Open finance and the use of real time data can give lenders a more accurate picture of someone’s financial position, rather than relying on a credit score that may be dated, damaged or low. It is important that we harness the next evolution of open finance and tie it directly to financial inclusion by improving understanding of people’s financial position and their access to appropriate and increasingly personalised products. As we design the future of Open Finance, as an industry we need to learn the lessons from the implementation of Open Banking, ensuring that it is engrained in businesses from the start and that uptake with customers is high so more people benefit. 

“To make the most of Open Banking as an industry we need to invest more in adopting the opportunities that are already available. It is also important that we bring the public on board now so that they can see the benefits ahead of Open Finance taking off. Going forward it is crucial that we review the 90-dat rule for re-authentication, which causes friction for consumers and increases drop-off, in order to bring the UK in line with international markets.”

Maria Harris, chair of the Open Property Data Association said  “The FCA’s open finance roadmap is an important and welcome step forward. Property and finance are two sides of the same coin, and for the homebuying process to truly improve, the data that underpins both must be compatible, consistent, and connected. We are actively collaborating with the FCA, Open Banking Ltd and the wider Smart Data Council to ensure our smart data schemes can operate together.

“We’re particularly pleased to see a commitment to a policy and technical sprint this year. Creating a framework that allows property, mortgage, and financial data to flow securely and seamlessly between systems is essential if we want faster transactions, fewer fall throughs, and greater transparency. OPDA is already contributing to this work through the FCA’s PRISM taskforce, helping to assess the impact of the priority use cases and ensure the foundations are right.

“Open finance has the potential to transform the homebuying journey – from faster mortgage approvals to more accurate affordability and smoother completions. But that can only happen if the underlying data is standardised, accessible, and trusted. This roadmap signals real momentum, and we’re pleased to be working with industry and regulators to deliver a better home buying and selling process, helping to drive economic growth and a more sustainable property market.”