FCA Open Finance Roadmap: Another stage of the UK’s smart data revolution

Building on the foundations of open banking

• While open banking already allows consumers and businesses to share access to payments data with trusted apps, open finance will facilitate secure data sharing across a much wider range of products and services including SME lending, mortgages, insurance, pensions, savings, investments, credit, debt management and account switching. Linking in with the National Payments Vision and its Payments Forward Plan, it is the government’s intention that the open banking framework (due to be consulted on by the FCA before the end of 2026) will lay the foundations for open finance.
• Research conducted by Open Banking Limited and EY suggests that the combined economic impact of open banking and open finance could amount to £7.4 billion per year in 5 years’ time.

Enhancing open finance benefits through emerging technologies

• The benefits of open finance could, among others, include simpler switching, more competitive pricing, enhanced financial inclusion, and better fraud prevention.
• These benefits could be intensified by leveraging emerging technology such as AI and tokenisation. Agentic payments could also be helped to reach their full potential through agents’ access to broader open data sources.

‘Critical enabler’ for smart data schemes across the economy

• The FCA describes open finance as a ‘critical enabler’ for developing smart data schemes across sectors – thereby increasing the potential for innovation.
• For example, it has already committed to collaborating with the financial services industry and the energy sector to look at how banking data can help to assess whether people would benefit from social tariffs for utilities.

What lies ahead on the Roadmap?

The approach outlined in the Roadmap is described by the FCA as ‘pragmatic, evidence-led and collaborative’, and will draw on lessons from open banking and international experience to ensure that open finance is developed in a ‘secure, trusted and proportionate’ way.

Broadly, the FCA will be focusing on two main strands of work in 2026-27:

1. Engagement with industry, consumer groups and other regulators to develop a range of practical open finance use cases via its Smart Data Accelerator and PRISM (Prioritisation and Real-world Insights Selection Matrix) Taskforce; and
2. Working with HM Treasury and other stakeholders on a regulatory framework for open finance, although firms will be supported to introduce open finance products sooner where appropriate.

2026

• The FCA is hitting the ground running in 2026 by prioritising what it terms ‘high-impact use cases’ where open finance can deliver benefits most quickly, namely lending to SMEs and improving consumers’ access to mortgages (as well as looking to collaborate with the government’s smart data scheme on reforming homebuying).
• This choice reflects existing initiatives in both areas including the FCA’s Call for Input on understanding how its regulation can help SMEs access finance (which closed on 17 April), its ongoing Mortgage Rule Review work and its recently concluded TechSprints on SME lending and mortgages as part of its Smart Data Accelerator. Participants in the TechSprints explored ideas addressing sector challenges, for example AI-enhanced affordability assessment tools for mortgages, reusable data packages for loan applications and AI-assisted business planning for SMEs.
• Various stakeholder engagement initiatives including Policy and Tech Sprints and the FCA-led PRISM Taskforce (to identify other high-impact use cases) will culminate in publication of a discussion paper on delivering a framework for the first open finance scheme in Q4 this year.

2027

• 2027 will see the FCA working with HM Treasury, using evidence from earlier phases to inform options for open finance’s long-term regulatory framework and seek views on these through a discussion paper. This broader work will include identifying where common frameworks, shared infrastructure or governance arrangements are needed to unlock the benefits of open finance at scale.

2028-2030

• The remaining period from 2028 to 2030 will focus on collaboration with industry to launch sustainable open finance schemes with clear governance, high standards of consumer protection and interoperability.

What’s next?

The FCA plans to assess the impact of its paper on the wider ecosystem over the coming months, and will keep its planned Roadmap activities under review. Interested parties are invited to email [email protected] if they would like to discuss the paper.

In parallel with developing the regulatory framework for open finance, the FCA is keen for industry to explore which aspects can be delivered without additional regulation. It will work with industry on this, including through its Digital Sandbox.

The FCA will also continue to collaborate internationally on cross-border data portability and open finance. It cites the example of its participation in the BIS Innovation Hub Hong Kong’s Project Aperta, which is looking at reducing frictions and costs in global finance.

The FCA will consult on its proposed long-term regulatory framework for open banking before the end of 2026.

If you would like to discuss how the FCA’s plans for open finance could affect your business, please get in touch with one of the people listed above or your usual Hogan Lovells contact.

Authored by Virginia Montgomery.