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How to Unlock Open Finance’s Potential in 2023 Revealed by Innovate Finance

Innovate Finance, the industry body representing UK fintech, in partnership with professional services firm Boston Consulting Group (BCG), has released a new report with key recommendations for the UK to unlock the full potential of open finance.

The UK is considered one of the most advanced open banking markets in the world having sparked key innovations in the financial services sector in recent years. The UK’s leading role in open banking and potential role in open finance is however being challenged as other countries advance.

Maintaining a lead

The report highlights key areas where the UK needs to act to continue leading on open banking. This includes a supportive regulatory environment and more use cases that show the benefits to consumers. Key findings – based on interviews with 12 leading UK fintechs- include:

Removing key hurdles

The evolution of open finance in the UK requires the removal of hurdles on data retrieval from banks. These include inconsistent or absent fields, poor availability, unplanned outages, noncommunication of planned outages to TPPs, inconsistent transaction IDs over time, and API request quotas.

A more inclusive and transparent governance

The next evolutionary step for open banking is to define inclusive and transparent governance. This is as well as an incentive framework that can support economic growth and innovation.

An example of a well-rounded objective setting through enhanced governance could be a wider roll-out of variable recurring payments (VRPs), enabling businesses to collect payments for variable amounts and intervals without consent from users for every new payment.

A forward-looking perspective on policy

To transform open finance from a regulator-driven set of remedies to a principles-based framework that focuses on real-world outcomes, we need a new set of guiding principles that ensure the primacy of data ownership and portability.

Open finance as a force for good

Open finance should be a force for good in the UK, helping consumers and businesses – especially those most vulnerable – to navigate financial challenges. To achieve this, all stakeholders need a governance structure with clear priorities and incentives.

Catalyst for innovation
Janine Hirt, CEO at Innovate Finance
Janine Hirt, CEO at Innovate Finance

Janine Hirt, CEO at Innovate Finance, comments: “Open banking has been a catalyst for innovation in the financial services sector. This is especially the case in the UK where competition and market regulation has resulted in more empowered customers supported by a booming fintech ecosystem.

“As a result of its efforts, the world has looked to the UK as a pioneer and vanguard in open banking. However, other countries are increasingly challenging the UK’s leadership position as an early adopter.

Fix glitches

“To maintain our global leadership, the UK must put open banking implementation systems on a permanent footing: fixing the glitches in the current approach, and building on this to extend open banking to other financial services (open finance) and beyond to other sectors.

“The report unpacks what is needed for the UK to develop a practicable strategy to unlock the full potential of open finance. A crucial component is a regulatory environment that creates the right incentives for industry and recognises the role fintechs play in building and developing the UK’s open finance ecosystem. Furthermore, our collective efforts to evolve the UK’s open banking framework can enable some use cases and customer benefits, as highlighted by the report.

“Last but not least, I am grateful to our inspiring members at Innovate Finance whose input helped shape the content of this report, and to our valued partners at Boston Consulting Group. Looking ahead, we at Innovate Finance will continue to engage with industry, regulators and policymakers to enable the UK to fully embrace open finance – and in doing so deliver economic and societal gains by creating a more democratic, inclusive, accessible and affordable financial services system for all”.

Working together 
Kunal Jhanji, managing director and partner at Boston Consulting Group
Kunal Jhanji, managing director and partner at Boston Consulting Group

Kunal Jhanji, managing director and partner at Boston Consulting Group, comments: “The UK has long led the way in open banking, working to create a vision for the world to follow and a farsighted roadmap for the future. The result has been a stronger, more vibrant overall UK financial-services industry, with innovation to benefit consumers and businesses alike at its heart.

“With the advancement of open banking globally however, models and approaches have emerged that provide inspiration for the next evolutionary phase of this ecosystem in the UK. Therefore, now is the time for the UK financial market to work together in order to advance the open finance vision. It is only through such collaboration that we can truly unlock the widespread additional benefits for consumers and businesses, and create a stronger, more innovative UK financial services industry as a result”.


  • Francis is a journalist and our lead LatAm correspondent, with a BA in Classical Civilization, he has a specialist interest in North and South America.

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