Innovate Finance, KPMG propose three Open Finance roadmaps

KPMG and Innovate Finance have proposed three “potential scenarios” to implement Open Finance in the UK, in a new joint report, which are intended to provoke debate and discussion among legislators and industry stakeholders.

The scenarios are named ‘Universal Mandate’, ‘Individual and Incremental’ and ‘Strategic Plan’ and are published in the report ‘The Roadmap to Open Finance in the UK’, co-authored by KPMG and Innovate Finance.

KPMG’s Open Finance lead Ellie Hewitt

Each of the three scenarios will result in different use cases and macroeconomic outcomes, and are not mutually exclusive nor “exhaustive”, according to Innovate Finance and KPMG.

The first scenario, ‘Universal Mandate’, is described in the report as introducing “a broad, data sharing mandate simultaneously across all sectors, from which innovative market players can develop data-led commercial propositions”.

Australia’s Consumer Data Right is cited as a comparative example of this approach.

Under this scenario, the “winning” use case is a “far-reaching ‘super app’ where consumers have access to all of their data in one centralised place, enabling simple management of the lifestyle they lead”.

The ‘Individual and Incremental’ scenario outlined in the report “would see individual sector or use case initiatives being mobilised, driven either by regulators or market initiatives”, and is likened to the current state of the UK’s ecosystem.

In this scenario, propositions that are adjacent to existing Open Banking frameworks, such as savings, account switching and investment, “will be quickly identified as low hanging fruit”.

The third and final scenario proposed in the report would see the creation of a “future pan-governmental oversight entity responsible for ensuring consistent standards, access and certification, disputes and working with the market to ideate new roadmap innovation”.

This scenario aims to maximise the “interoperability and collaboration” between sectors and enables the prioritisation of the most complex cross-sector use cases, according to the report.

Janine Hirt, chief executive officer of Innovate Finance, and Ellie Hewitt, Open Finance lead at KPMG wrote in the foreword: “Our aim is to provide a framework and provocation for conversation and debate, to help develop thinking on what the right roadmap (or roadmaps) should be for 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 report comes as the Centre for Finance, Innovation and Technology has been appointed to chair an industry-led Open Finance Taskforce, as announced by Bim Afolami MP, Economic Secretary to the Treasury.