The UK Financial Conduct Authority (FCA) and the Information Commissioner's Office (ICO) have published a joint article through the Digital Regulation Cooperation Forum (DRCF), outlining their collaborative efforts and next steps to shape the future of open finance and smart data. Open finance seeks to extend open banking principles to a wide range of financial products, empowering consumers with greater control over their data while promoting innovation and competition. The article emphasises the importance of secure, consent-driven data sharing, supported by the UK's Smart Data framework and the newly enacted Data Use and Access Act, to be integral to the vision for open finance. The ICO will play a key role in ensuring that data protection and consumer rights remain central to the development of open finance.
The regulators highlight the transformative potential, and associated risks, of technologies such as application programming interface, AI, distributed ledger technologies and digital identity verification. They stress the need for robust governance frameworks and reference existing guidance, including the ICO's AI guidance and its plans to develop a statutory code of practice. On digital identity verification, the article notes ongoing government work, including the development of the UK Trust Framework by the Department for Science, Innovation and Technology, to enable secure and reliable verification systems. Both regulators reaffirm their commitment to working with the government and other bodies to support cross-sector data initiatives.
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