06 Apr 2021

Open Finance and Inclusion Week

During this campaign week techUK focused on key topics for the financial services and technology industries which are critical to the UK wider economy as we embark on the economic recovery. With members’ contribution, we looked at the opportunities around extending the Open Banking principles to other sectors of financial services including pensions and insurance, and financial inclusion. We will also cover these two topics on Tuesday 20 April at techUK’s Open Finance and Inclusion Summit. You can find out more and register here: https://www.techuk.org/open-finance-inclusion-summit.html

The COVID-19 pandemic has impacted societies across the globe and changed the way many people work and access services. Financial services (FS) sit at the core of the economy and enable a wide range of activities from accessing salaries and benefits, mortgages, and cash and capital management. As the health crisis struck, the industry and the Government reacted quickly and at an unprecedented pace to establish new schemes and processes to continue to support the economy and communities.

Throughout 2020 we have seen the real value of digital finance - how it can transform the way everyone accesses, stores, and moves money. Not embracing the digital transformation journey could be detrimental to the resilience of the ecosystem as well as customers' ability to access essential services. Efforts are also required to ensure that no one is left behind and that everyone can access and benefit from the entire financial services ecosystem.

In the UK, customers can enjoy a wide range of services from multiple providers. The fintech revolution brought to market many new solutions and ways of consuming FS services. Technology is now a core part of banks and other providers’ products. The increased use of artificial intelligence, machine learning, and big data analytics combined with new architecture design supported by biometrics, cloud and distributed ledger technology is a game changer. These developments could not take place without data, and particularly data sharing and mobility.

The big innovation comes from the use of data produced, which has vastly increased during the past decade and can now be shared and analysed to provide customers with better experiences and services. The Revised Payment Services Directive provided a stimulus to the ecosystem, enabling customers to choose to securely share their FS data with third party providers in return for personalised services, advice and analysis of their incomings and outgoings.

As we approach the completion of the final road map for the implementation of Open Banking and regulators and Government’s consultation on Open Finance, we need to bring the ecosystem together to consider the best approach to achieve Open Finance.

Beyond Open Finance, digital finance and the application of new technologies can improve inclusion in the United Kingdom, helping companies reach all customers and respond to the pressing needs of businesses, communities, and individuals. There are also challenges to overcome with regards to accessibility, and here again technology could provide some innovative solutions.

As we move towards a digital finance world, opening many opportunities for the financial services ecosystem to provide new secure services, we must ensure inclusion is a fundamental part of every step of this journey. In the context of the economic recovery and the impact of COVID-19, financial inclusion is key to ensuring we deliver inclusive growth for everyone across the regions and nations. From vulnerable customers to the gig economy and SMEs, the spectrum and needs are diverse and wide.