Out-Law News | 14 Mar 2022 | 12:35 pm | 2 min. read
‘Open finance’ data has been highlighted as one of the key strategic innovation themes for Scotland’s financial technology (fintech) hub in a 10-year strategy document published earlier this month.
Finance data is the personal and business information that is created when people buy and use financial products and services, such as current account payments and transactions, savings, mortgage lending, investments and pensions. It is captured, stored, and managed by financial services firms. In its ‘roadmap’, industry body FinTech Scotland said this data could, with consent, be digitally shared with others for consumers’ benefit as part of an ‘open finance’ system - and could be widely used to create new financial products and services.
“There are now several UK government led initiatives in flight that could pave the way for open finance, including development of the National Data Strategy, Smart Data Review, and the Pensions Dashboard,” the report said. “The key to success is providing a coherent and standardised framework to enable the data to be unlocked safely and securely. The approach to framework implementation is critical.”
The roadmap reiterated FinTech Scotland’s support for the Smart Data Foundry (SDF), an open finance project established at the University of Edinburgh in 2018. The SDF encourages research and innovation by providing a secure environment that can host open finance data. Since the outbreak of the Covid-19 pandemic, the project has helped UK and Scottish government departments analyse economic data and worked with the Information Commissioner’s Office. The report said the SDF’s work helped demonstrate “the demand for data-driven FinTech research and innovation”, adding that its close links to academia, business and government would help make a “real difference” to people’s lives.
But while FinTech Scotland said it was “good to see” progress made towards open finance in the UK, but warned that other countries were also picking up pace. “The UK’s initial dominant position has been equalled and could potentially be surpassed,” it said, citing the introduction of Australia’s Consumer Data Right (CDR). “This could challenge the advances made in the UK and underlines the imperative for more research and innovation in open finance,” it added.
Contributors to the roadmap stressed that open finance data will create more opportunities through the application of emerging technologies, resulting in new data driven innovations, emergence of new business models and significant improvement to customer and business engagement with the financial services industry. FinTech Scotland also said insights generated from open finance data could be useful for policy makers, regulators, and governments, allowing “the legislative and regulatory landscape to evolve, and create the environment needed for the future of finance.”
FinTech Scotland also outlined key strategic aims for climate finance, financial regulation and payments and transactions. Over the next decade, the group said it hopes to create an additional 20,000 fintech related jobs in Scotland, as well as boost the country’s economic gross value added (GVA) through fintech innovation from £500 million in 2021 to £2.1 billion by 2031. Its roadmap was published on the anniversary of the Kalifa Review, which set out a number of recommendations to “accelerate the development of cluster excellence”.
Yvonne Dunn, fintech expert at Pinsent Masons, said: “Fintech is disrupting global financial markets and it is growing. There is still a lot to do to attain the advances that could drive meaningful change. As we look across international developments, Scotland has a lot to offer based on its financial heritage, strength of our universities and culture of entrepreneurism. The FinTech Scotland cluster is a clear demonstration of what can happen through collective action. This roadmap gives us a framework to move further forward in the right direction.”
In January, FinTech Scotland announced a surge in the number of companies focused on financial technology and identified an acceleration in the number of firms moving towards a digital economy. The group reported that Scotland’s fintech community had now reached 190 small and medium-sized enterprises (SMEs) – up from 147 in 2021.
01 Mar 2021
18 Dec 2019