A new report has warned that a standardised approach to open banking could stymie fintech innovation, suggesting that UK regulators take an Australia-style, market-led approach instead.
The report – written by the Coalition for a Digital Economy (Coadec) – lays out a framework for fintech investment and open banking engagement in a post-Brexit economy.
Coadec has called for the UK government to adopt an Australian-style approach to open banking, where consumers are given instant access to their financial data, as well as utility and telecoms data.
By tapping these extra data channels, Coadec argues that consumers will be able to make more informed choices with their money, while accessing the most appropriate forms of credit.
This approach would also allow fintech start-ups and alternative lenders to ‘level up’ and compete with high street banks for consumer business, the report added.
“What open banking has shown is that when the consumer is in control of their data and who they share it with, this can build trust, drive engagement and empower activity,” said Joel Gladwin, head of policy at Coadec.
“But the banks were able to send armies of slick lobbyists and magic circle lawyers to Brussels to build extra barriers to fintechs and maintain their gatekeeper roles.
“By granting consumers a new data sharing right, and encouraging a market of API specialists to compete in building the plumbing for open finance, banks will have very little room for manoeuvre this time.
“Ultimately, this will allow consumers to access better, and more tailored, financial services than they do currently.”