Regulation will be critical to the success of open finance. On 15th November last year, we joined Gavin Littlejohn, Chair of Fdata Global, Laura Douglas, Senior Associate at Clifford Chance and moderator, Douglas MacKenzie, Host & Deputy Director of Fintech Finance on the FTT Open Finance Stage at the Fintech Talents Festival.
The panel explored the key regulatory initiatives to be taken as we move to the next stage of open finance. As we broaden out from open banking, which provides access to payments data and payments initiation, we are moving towards third parties receiving explicit consent from end-customers to access other pieces of their financial puzzle, such as investment, pension, insurance and mortgage data.
End-customers as data subjects can now share more information than ever before and not just within finance. The Smart Data Working Group enables companies and consumers to choose to share more data, such as health, telephony or utilities. Gavin emphasised the importance of the next steps for the UK; to ensure that different initiatives are interoperable and have the same basic tenets of consent liability framework, digital identity, governance and the right technical standards to enable them.
Our moderator, Douglas, then shifted the focus onto what regulators will need to think about when deciding upon regulations. There is an element of “seizing the moment” and regulating at the right point in the innovation cycle. Regulating too early can stifle innovation, but on the other hand, it is important to be mindful of consumer protection.
Regulation will also have an important influence on building greater customer trust in open banking and data-sharing. But aside from educating the audience, this is likely to come down to building genuine trust in the regulated system itself. As Gavin comments, most people trust their fridge to keep food cold, without fully understanding how the electric works. Arguably, this genuine trust will play a more important part than education.
The panel also explored open banking within the corporate world as one area that they are seeing a lot of growth in. Listen to the full session from FTT Open Finance below!
The panellists:
Douglas MacKenzie, Host & Deputy Director, Fintech Finance (moderator)
Laura Douglas, Senior Associate, Clifford Chance
Gavin Littlejohn, Chair, Fdata Global
