Britain wants fintech banks to grow.
On Monday, Britain’s financial authorities announced they would create a new agency to promote banking competition through fintech apps over the next two years.
Open banking—third-party firms accessing financial data from conventional lenders to offer personalized services like loans or payments—has helped make Britain’s fintech sector the world’s third largest.
In 2018, Britain’s Competition and Markets Authority ordered banks to share data with other corporations if clients consented to open banking, utilized by around 7 million people and businesses.
Regulators aim to establish a long-term body to promote open banking and expand it to other sectors of the economy, helping London become a worldwide fintech hub.
“We will also work with open banking participants over the next few months to undertake further analysis of the options for the structure, governance and funding of the future entity,” the Financial Conduct Authority and Payment Systems Regulator said in a joint statement.
“While significant progress has been made, there is more to be done to deliver the full benefits of open banking within retail banking markets, and beyond,” the statement stated.
Marion King, head of Open Banking Limited, monitors the nine banks’ compliance with open banking standards, said regulators’ suggestions would boost open banking and assist other sectors.
As the EU prepares to adopt its broader open banking, Britain wants to advance open banking after Brexit to attract more fintech.
The authorities claimed UK fintech successfully uses open banking technology, but industry officials warned against complacency on Monday.
Chris Hayward, policy chief at the City of London Corporation, which manages the capital’s financial area, said Britain’s fintech sector ranks third globally, after the US and China, with $12.5 billion invested last year.
“Global competitiveness is the name of the game now,” Hayward added.
Industry officials said Britain’s new consumer rules must not hinder fintech players.
“We need proportionate regulation,” said Innovate Finance CEO Janine Hirt.
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