We responded to the Department for Science, Innovation and Technology’s (DSIT) call for evidence on ‘Smart Data opportunities in digital markets' through the International Regulatory Strategy Group (IRSG). The IRSG is a joint venture between TheCityUK and the City of London Corporation. Its remit is to provide a cross-sectoral voice to shape the development of a globally coherent regulatory framework that will facilitate open and competitive cross-border financial services.
Overall, we support steps to develop a Smart Data ecosystem in the UK. Implementing Smart Data could unlock £149bn of organisational efficiency and £66bn of new business and innovation opportunities for the UK economy. Data is a fundamental asset to financial and related professional services industry firms, and the industry is well-positioned to drive further innovation through Smart Data initiatives..
Key messages:
- Customer needs: Financial services customers generate large amounts of data, but customers face barriers in accessing and securely sharing this data. Smart Data initiatives can help overcome these barriers, enhancing customer trust and enabling better financial management.
- Economic opportunity: Unlocking Open Finance presents a major opportunity to enhance customer experience, expand access to SME lending and strengthen competition, helping to deliver greater economic growth across the UK.
- Feasibility and Impact: The success of Smart Data schemes depends on regulatory clarity, industry engagement, and commercial viability. The government should work closely with industry to ensure the framework is future-proofed and commercially viable.
- Lessons learnt from Open Banking: To successfully implement Smart Data across wider digital markets, the UK should leverage the lessons learnt from Open Banking, where UK leadership has already demonstrated the feasibility and impact of implementing Smart Data schemes.
- Costs: While in many cases the long-term benefits of Smart Data will justify the upfront costs, the government and regulators must take these into account when designing rules and timelines for Smart Data adoption.
- Protecting customers: The safe, secure and private storage and transfer of customer data is paramount to our industry and protecting customers must be the foundation of any Smart Data scheme.
- Future regulatory regime: Coordination between different regulators is key to ensuring a proportionate, coherent and consistent approach to governing Smart Data schemes across different regulatory remits. The government should consult the industry on any regulatory proposals before designing the future regime.
- UK Context: DSIT should coordinate with HM Treasury (HMT) and the financial services regulators to align the development of a Smart Data scheme with developments in our industry and to consider how to best leverage Smart Data across existing and future industry reforms.
- International examples: The government should consider lessons learnt from implementing Smart Data in other jurisdictions.
Overall, our response emphasises the potential benefits of Smart Data initiatives for the UK economy and the importance of a secure, transparent, and well-regulated framework to support these initiatives.
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