Innovate Finance and KPMG Proposes Scenarios to Implement Open Finance in the UK
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Innovate Finance and KPMG have tabled proposals for “potential scenarios” to bring Open Finance to the UK.
In a joint report, the two entities sought to ignite debate and discussions among legislators and stakeholders in the industry. The scenarios announced by the two entities are “Universal Mandate”, “Individual and Incremental” and “Strategic Plan.”
Innovate Finance and KPMG to Implement Open Finance
The three scenarios announced by Innovate Finance and KPMG will lead to multiple use cases and macroeconomic outcomes. The scenarios are not mutually exclusive or exhaustive.
The first scenario is known as “Universal Mandate.” The report describes it as launching a vast data-sharing mandate across all sectors. This mandate will see market players create commercial propositions that are inspired by data.
In the report, Innovate Finance and KPMG have said Australia’s Consumer Data Right as an example of this approach.
This scenario describes a winning use case as having a superior app that consumers can use to access all consumer data from a single platform. This scenario also seeks to support a simple management of the lifestyle that a consumer has led.
The second scenario is the “Individual and Incremental” scenario. This scenario has been mentioned in the report as seeing use case initiatives and the individual sector being mobilized. The scenario involves the participation of market regulators and market initiatives, and it is currently being linked to the current state of the economy in the UK.
The “Individual and Incremental” scenario involves propositions that exist alongside the existing Open Banking frameworks. The propositions include features such as savings, investment, switching accounts, etc. These proposals have been identified as a “low-hanging fruit.”
The third scenario announced in this report will support the creation of a pan-governmental oversight institution in the future. The institution will ensure consistent standards while also supporting access and certifications.
The report mentions that this initiative will boost collaboration and interoperability between different sectors. The scenario will also support the prioritization of some of the complex use cases across the sector.
Establishing a Roadmap for Open Finance
The CEO of Innovate Finance, Janine Hirt, and the Open Finance Lead at KPMG, Ellie Hewitt, opined that the goal was to create a framework and set the stage for a discussion and debate around Open Finance. The framework sought to develop the right thinking on the roadmap needed to support Open Finance in the UK.
“We want a big conversation across the ecosystem: with users and consumers; all financial services and institutions; fintechs; Big Tech; regulators; policymakers and government,” the executives said.
