What Comes Next for Open Banking? The Policy View

My interest in this space began in politics rather than in the technology itself. Having worked in politics for over a decade, I have always been drawn to the mechanics of how markets are designed and, in particular, how regulation, thoughtfully applied, can create genuine competition rather than simply managing incumbents. More competition means better outcomes not only for the consumer, but for the economy as a whole.

I first realised the importance of data ownership at the very start of my career, working at the European Parliament for the rapporteur on the GDPR, at a time when the idea that ordinary people might have an enforceable right over their own personal data was still, to most of Brussels, a novelty rather than a principle. Sitting inside that negotiation meant watching, at close quarters, the collision between an industry that had always treated data as its own to use as it wished and a parliament trying to establish, for the first time in law, that it belonged to the person it described. It was formative.

Later, back in the UK as part of City of London Corporation delegations, I met thriving communities of builders and innovators across the country, from Cardiff to Sheffield, Manchester and Liverpool, and witnessed first-hand what the fintech market was creating: new ideas, new companies, new jobs and real energy pouring into the UK economy, well beyond London. It was a genuinely new market, built from scratch and at no cost to the taxpayer. Smart regulation did that. It is what led me to join Open Banking Limited, where I was able to promote this concept further and help keep open banking at the top of a crowded political agenda.

Founding Smart Data Group was a natural continuation of the same instinct, applied more widely. If data portability worked for banking, there seemed no principled reason why it should not work for energy, home buying, telecoms or retail. At heart, the data-sharing economy is a question about power: who owns information and on what terms. I believe we, the people, should own our own data and should decide how it is used and where it creates the most value. This idea of self-determination and ownership has occupied me, in one form or another, for most of my career, which is, in the end, why this was always a question of politics before it was ever a question of technology.

The honest answer is that we are closer in theory than in practice. The Data (Use and Access) Act, which received Royal Assent in June 2025, on the same day Smart Data Group launched, finally gave government the power to mandate data sharing and establish smart data schemes across sectors beyond banking. It may well be the most important legislative step since the original open banking mandate itself.

However, government has not rushed to use those powers. Its clear preference was for the market to set the direction, building voluntary smart data schemes case by case. Companies, in turn, have been refraining from doing so until government’s own direction is clearer, and the result is a fairly classic catch-22.

I recently took part in the Smart Data Accelerator open finance mortgage policy sprint, looking at what mechanisms might be needed for open home buying and mortgages to become a reality. This gave me a close view of how much genuine appetite exists among firms to build on this data and make home buying an easier, more accessible process; the ambition from every participant was not in question.

What is in question is access to the data itself. Although we were split into different groups, it was not in the least surprising that everyone reached the same conclusion: mandation is now necessary. The secondary legislation needed to mandate it is still working its way through Whitehall, but it is good to see the FCA showing leadership and pressing government to make this a priority.

So: closer than five years ago, certainly, but further away than the policy documents sometimes suggest.

It is rarely one thing; usually, it is several factors compounding one another. Commercially, banks were asked to fund an initiative that primarily benefits challengers and third-party providers. It should not surprise anyone that this created friction over cost allocation, which still needs to be resolved as we move to the next phase.

Politically, financial services regulation competes for attention against whichever crisis is loudest that week. Open banking and smart data, however consequential in the long run, rarely feel as urgent as whatever is dominating the headlines.

On the regulatory side, the governance question – who runs the successor to Open Banking Limited, known as the Future Entity, how it is funded, which voices it represents and to whom it is accountable – might reasonably have been expected to take less time to settle than the original mandate did. The FCA and PSR’s Joint Regulatory Oversight Committee began that work years ago, and the transition has taken longer than anyone hoped.

If I had to name the single largest obstacle, it would be institutional: open banking was built as a project with a deadline, and projects end. What the UK now needs is fresh vision and clear leadership to move at pace. What is at stake is not simply delivery, but the UK’s leadership in a space it created; other countries are now overtaking us.

The Payments Forward Plan, published earlier this year by the Payments Vision Delivery Committee, at least gives the sector a three-year roadmap to work towards, which is more clarity than the market has had in some time. A roadmap, though, is only as useful as the milestones actually met against it, and three things matter most.

First, the Future Entity needs to be stood up quickly, with a funding model that does not simply replicate the disputes that have delayed it. Industry cannot be asked to fund its own disruption indefinitely without clarity on return. At the same time, there are far more players to be represented than there were in 2018, and that should be reflected.

Second, the smart data provisions in the Data (Use and Access) Act need to move from framework to scheme through secondary legislation, sector by sector, following finance’s lead rather than each sector reinventing the governance model from scratch.

Third, and this is perhaps the least discussed point, the UK needs to watch how it compares internationally. I have seen how quickly other jurisdictions are adopting the UK’s model without necessarily inheriting its scars. Our advantage as first mover will not last if delivery continues at this pace.

Genuine success will not be measured by how many API calls exist or how many firms are authorised. It will be measured by whether an ordinary person, switching a current account, comparing a mortgage or trying to access affordable credit, finds the process meaningfully easier than it was before. It could be argued that the industry has, at times, mistaken infrastructure for outcome, building the pipes and declaring the job done before anyone has actually used them.

For me, genuine success looks like a lower-income household being approved for a product that credit scoring alone would have refused them because open banking data showed a more accurate picture of their real financial behaviour. It looks like switching a mortgage or an energy tariff taking minutes rather than weeks. It looks like consumers, not incumbents, capturing most of the value that better data sharing creates.

And it looks like the next generation of innovators and entrepreneurs being able to start building on this data quickly, without first having to fight their way through the permissions and gatekeeping of an incumbent institution. Genuine success is measured in how easy it becomes to start, not only in how sophisticated the plumbing is once you are inside. The UK has built genuinely world-leading regulatory infrastructure for this. Is it too much to ask that ordinary people actually feel the benefit of it?