Call for market-led approach to open finance services

The Coalition for a Digital Economy is recommending a more market-led approach to providing open finance services

Fintech companies are reportedly urging the UK’s Financial Conduct Authority (FCA) to “break” banks during 2021.

A group of London-based startups is asking the FCA to look into ending the control and dominance of traditional banking institutions, specifically their use of consumer data. The companies have stated that this move should increase healthy competition in key financial services.

The Coalition for a Digital Economy (Coadec), which serves as the policy voice of Fintech startups and other tech scaleups and reportedly includes former UK Prime Minister Tony Blair’s son Euan as one its board members, is recommending a more market-led approach to providing open finance services (somewhat like in Australia).

Coadec is calling on the FCA to put an end to what they consider to be an “overly-standardised” approach to offering these types of financial services.

Joel Gladwin, Head of Policy at Coadec, noted that if Fintechs are provided more access to data this year, then it should increase competition in key services like savings, credit, mortgages and pensions. Gladwin added: Banks were able to send armies of slick lobbyists and magic circle lawyers to Brussels to build extra barriers to Fintechs and maintain their gatekeeper roles.

But if consumers are able to have greater control of their banking details and related information, then it could help increase trust, promote more engagement and empower activity, Gladwin claims.

The Fintech companies stated that there has to be an end to bank charges on third-party firms for accessing their financial data. They also recommended removing the 90-day re-authentication requirements, which asks customers to re-authorise their banking provider to release their financial data for use by other parties.