UK Government Announces the Formation of an Open Finance Taskforce

The UK government has announced the formation of a new task force that will explore open finance and make it easier for small companies to access credit.

This open finance task force seeks to identify the datasets and the new application programming interfaces that will be useful in supporting the finance requests made by smack and medium-sized companies.

The open finance task force has been given until June 2024 to identify the use cases of open finance and offer recommendations to the government.

UK Government Forms an Open Finance Taskforce

The formation of this task force is an advancement to the recommendations announced by the CFIT in its Blueprint Report released in February 2024.

Future companies will use the work of this task force using APIs while unlocking the proposed use cases. It will also set out the future standards that are needed to support open finance globally.

The task force is planning to identify ways to incentivize businesses securely while sharing financial data. It is also considering the next steps to implement any recommendations that will be made.

The open finance task force will run two main working streams. One of the streams will assess data and API prioritization while the other will work on potential commercial models.

Creating proofs of concepts is necessary to inform what this task force will focus on when exploring data, use cases, and APIs. The CFIT is also working on two trial initiatives while building upon the PoCs created by the coalition across the industry.

Open Finance to Streamline Credit Access and Lending

Lenders that leverage open finance solutions will accelerate SME credit assessment and have an easier time making decisions on loans. They will also build upon the finding that accessing new datasets and auto-populating business loan applications can result in a major boost in lending decisions.

The coalition across the banking industry will feature Barclays and several other banks that are exploring datasets and the impact of decisions made on credit.

The PoC conducted on this matter demonstrated that leveraging open finance data can promote fast and easy access to credit. It will also result in more SMEs making positive decisions whenever they apply for credit. It will also lower the number of SME businesses that fail to complete the application process.

Open finance could also have a positive impact on the broader UK economy. It could increase the country’s gross domestic product (GDP) by up to £30.5 billion. The economy will receive a boost if SMEs can share inaccessible data sets with firms operating in the financial service industry.