Like many areas of the economy, the financial services sector is undergoing a data revolution. Companies are collecting more data about our financial lives, they’re using it to develop new products and services, and its economic value is increasing. Financial services companies collect more data on their customers than anyone else.
The government has accelerated this through initiatives to increase the flow of data. Open Banking, launched two years ago, allows customers to share their online banking payments information more easily and requires firms to allow third parties to initiate payments directly from a customer's account. Open Finance is set to extend this to all financial services companies, including pensions, consumer credit and investments.
It could bring big changes to the way we manage our money. Services developed using Open Finance could include a platform that allows people to view all of their products via a single interface, enabling them to switch more easily between providers. Consumers may be able to share their details with financial advisors in just a few clicks; potentially making access to expert advice more straightforward. Companies could gain more information to assess creditworthiness, potentially widening access to mainstream credit.
