Is the Smart Data reforms what UK businesses need to thrive?

A robust business alliance spearheaded by John Penrose, MP for Weston-Super-Mare, is urging the government to expedite Smart Data reforms, which aims to bolster the competitiveness of British exporters, stimulate investment in UK digital jobs, and offer better bargains for consumers, all of which will help to reduce the cost of living.

Commissioned by Rishi Sunak, Penrose has thrown his weight behind measures to enhance Britain's world-leading digital success in open banking to be extended as quickly as possible to industries beyond financial services.

The partnership includes entities such as NatWest, TISA, the Financial Data and Technology Association, The Payments Association, Open Banking Excellence (OBE), fintech Ozone API and Icebreaker One. They have jointly written to ministers, advocating for swift implementation of previously agreed reforms in order to prevent British businesses from being disrupted by foreign competitors.

The proposed reforms in the Data Protection and Digital Information (No.2) Bill includes provisions to introduce Smart Data reforms, but no specific timelines have been provided for their enactment in various business sectors. However, UK business leaders require confidence in order to initiate investment programs immediately, and modern digital enterprises must move much, much faster than traditional customary speed.

Penrose, Author of a Sunak-commissioned report on UK Competition Policy, stated the transformative impact of open banking and smart data on the UK banking system. According to Penson, this is due to the fact that it is "giving us all cheaper and better-value services even if we don't realise it's what lies behind the online financial apps and services so many of us are using nowadays".

The MP for Weston-Super-Mare, in acknowledging the global success of open banking in the UK, cautioned that competitors in other nations will not stand still. So, to stay ahead, Penson said British businesses must replicate their success across the various sectors of the economy to provide better prices and develop world-leading enterprises in industries like online retailing and energy.

He expressed enthusiasm for the proposed reforms, but Penson said there is an urgent need for ministers to provide specific implementation plans and schedules once so businesses can get started.

Helen Child, Founder of Open Banking Excellence (OBE), in an interview, emphasised the importance of data sharing as the foundation of open banking. According to her, this data can be used by lenders to undertake accurate real-time affordability assessments and make more educated decisions, allowing previously excluded customers to demonstrate their trustworthiness. She also pointed out the role of open banking in personal financial management tools, enabling customers to have a comprehensive view of their accounts and make better financial decisions.

Child stressed that by accelerating the global expansion of open banking, the company can make an actual change during the cost of living crisis by addressing the challenge of financial inclusion.

Child lauded Penrose's amendment and the Bill for positioning the UK as a global leader in open banking and finance, urging support from all stakeholders to maintain this leadership position. She warned that if the government and regulators do not act, the country risks losing its hard-won worldwide leadership position.

Ghela Boskovich, Regional Director, Financial Data and Technology Association, Head of Europe, said the primary lesson from the UK Open Banking experience has been the importance of proper governance, oversight, and stakeholder convening, which Boskovich stressed, can only be accomplished through a coordinating body, an implementation entity.

Ozone API Co-Founder and CEO, Chris Michael, believes that Smart Data is projected to stimulate innovation and investment in various fields by tech companies. More importantly, he said this should provide significant and much-needed value to both personal and business clients.

He noted that the implementation of Open Banking in the UK and many other regions, including the Middle East and Latin America, has shown that having a well-defined standard, a strong mandate, and an implementation body is critical to delivering these benefits on time.

Tony Craddock, The Payments Association's Director General, stressed the importance of developing standards that can be applied across sectors to capitalise on expertise in open banking, in order to support the proposed amendments to the Bill.