FinTech Scotland, a market-led initiative with wide support in the country, presented in early March its 10-year roadmap to accelerate the adoption of fintech excellence in the country.
The report, supported by the industry, academia and regulators, designed an actionable plan about how the industry and regulators should collaborate to achieve the goals established in this report in the next ten years.
The four priorities are open finance, climate change, payments and financial regulation.
The first priority is to move from an open banking to an open finance economy. Finance data is the personal and business information created when people buy and use financial products and services. For example, current account payments and transactions, savings, mortgage lending, investments, and pensions create finance data. It is captured, stored, and managed by financial services firms. Open banking data is usually limited to current account payments only.
There are now several U.K. government-led initiatives in flight that could pave the way for open finance, including the development of the National Data Strategy, Smart Data Review, and the Pensions Dashboard. According to the report, the key to success in moving to open finance is providing a coherent and standardized framework to enable the data to be unlocked safely and securely.
The report states that open finance data will create more opportunities by applying emerging technologies, resulting in new data-driven innovations, the emergence of new business models and significant improvement to customer and business engagement with the financial services industry.
“Open Banking has advanced the way things are done in banking, but Open Finance will help us create and advance the digital economy,” said Derek Smith, Head of Digital Engineering, Virgin Money.
The three areas where the report foresees open finance can be first applied are everyday personal banking and business banking finance, long-term savings and investments and personal and business insurance.
But participants in this report highlighted that as the potential for open finance unfolds, more common data and privacy standards are required. At the same time, there is a need to explore and test data-anonymizing techniques.
In the same line, another area that needs further research is how to design fair and transparent data sharing principles and ethical ways of combining different data sets. This includes the use of synthetic data and its potential to support innovation while limiting potential data privacy and cybersecurity risks.
Interoperability and data standardization is key to moving from open banking to open finance as this may also include public institutions. There are some technical hurdles that, according to the authors of the report, may be overcome, but more could be done at the U.K. regulatory level to enable greater standardization.
Another priority in the report is how to improve financial regulation to enable fintech to thrive without imposing unnecessary requirements on companies. While U.K.’s regulation has been very progressive so far with the adoption of open banking rules, the report suggests that there are still areas where meeting regulatory compliance and managing regulatory risks often requires deep expertise and can be a barrier for new FinTech entrants.
“We support 11 different industry sectors — all with different regulations — so simplifying the compliance processes to adhere to these different regulatory regimes is key for us.” Robert McKenchie, Head of Products, Equifax U.K.
The report proposes, as next steps, to simplify compliance, for instance, by enabling sandboxes to leverage RegTech innovation and design digital-enabled regulation. The latter would allow regulators to collect information almost in real time to better monitor financial markets and to move from a position of reactive supervision to preventative interventions.
Read more: UK Govt Report: FinTech Needs Investment, Sandboxes And Job Training
——————————
NEW PYMNTS DATA: 57% OF CONSUMERS PREFER ADVANCED ID VERIFICATION AFTER TRYING IT
About:Fifty-seven percent of consumers who’ve used advanced ID verification methods such as voice recognition when contacting customer service say they’d do it again. The Consumer Authentication Experiences report, surveyed nearly 3,800 U.S. consumers to learn how offering innovative verification experiences is helping businesses deliver superior customer service across all channels.
Click Here For The Original Source.
————————————————————————————-