The FCA has initiated the establishment of developing opportunities, which are represented by the “open finance” review. The open finance review has been developed on the values of open banking. Open banking is data sharing that offers new methods for consumers and enterprises to utilize the maximum of their funds. The FCA stated that it expects that open finance would expand the open banking principles towards a larger range of financial services.
What is the FCA “Open Finance”?
The FCA stated that with open finance, traders will find it easier to compare prices, features of products and services, and switch any product or provider. Simply put, open finance will improve general insurance, mortgage markets, and cash savings. It will also aid in expanding the access to technical support, improve efficiency rates for businesses and access to credit, and create innovative strategies.
The FCA is currently expecting to hear feedback by 17th of March 2020, and a statement will be published in the summer of 2020. According to Keith Richards, the chief executive of the Personal Finance Society, he accepts the changes with open arms and believes that open finance will be a better method of engaging with customers in financial planning.
“It is always positive to see the FCA looking at ways to engage consumers with their financial needs,” he said. “It is also fair to say, open finance has the potential to increase the chances of vulnerable consumers not only receiving the appropriate cover they need, but also at an affordable price.
“The right values and regulatory regime for open finance needs to be created and presented to organisations and consumers alike. “This will ensure that they can enjoy the benefits of a fair and equal exchange of information.”
Open Finance and Cyber Threats
While discussing the transition, Keith Richards warned against the concerns of cyber-security crimes.
“The FCA needs to take full account of the data security risks of open access, what and who protects data sources at all points along the chain, and to ensure it is a system with in-built mechanisms to provide help and redress, should things wrong.”
The FCA is planning on launching a discussion on the possibilities and potential risks that may take place from open finance, and all the steps needed to guarantee that its development is to serve the best interests of customers. Also in regards to open finance, the FCA needs to discuss their role in the new sector.