Home Data UK government publishes smart data ‘roadmap’ for seven sectors

UK government publishes smart data ‘roadmap’ for seven sectors

UK fintech: the ‘Innovate Finance Global Summit’, held in London this week, saw numerous discussions related to smart data, as well as an announcement by the economic secretary to the Treasury that the Centre for Finance, Innovation and Technology (CFIT) would chair an ‘industry-led taskforce’ on open finance | Credit: Innovate Finance (main photo)

The UK government has published a ‘roadmap’ for how it plans to encourage the implementation of ‘smart data’ schemes across seven sectors of the economy, including banking and finance.

‘The Smart Data Roadmap: action the government is taking in 2024 to 2025’ document, a policy paper published this week (18 April), reveals next steps to creating what is described as a ‘smart data economy’ also in energy, home-buying, retail, telecommunications and transport. Published by the Department for Business and Trade, the plans aim to take advantage of the Data Protection and Digital Information (DPDI) Bill, which is currently progressing through parliament. 

Minister of state for enterprise, markets and small business Kevin Hollinrake writes in the 44-page document’s foreword that the government wants to ‘harness the opportunities for data to create efficiencies, tailor products and services, improve decision-making and empower customers to make better use of data that belongs to them’.

‘Through championing smart data – a form of data portability – we are facilitating the data economy to drive growth and innovation, and to enable services that ensure businesses and consumers get more for their money,’ Hollinrake writes. Smart data is defined in the document as ‘the secure sharing of customer data, upon the customer’s request, with authorised third-party providers (ATPs)’.

The UK’s relatively well progressed implementation of open banking is highlighted, with Hollinrake describing progress in open banking as ‘shining a spotlight on the spectrum of opportunities available to consumers and businesses when customers are put in control of their data’. The aim is, he says, to ‘build upon and learn from open banking, extending the principles that underpin its international success across the UK economy.’

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Four stages of progress

The seven focus sectors had already been identified in the ‘Autumn Statement’ presented by the Chancellor of the Exchequer in November 2023.

‘These sectors have been chosen due to existing progress with smart data or because of the impact that schemes in these sectors could have on the cost of living,’ Hollinrake writes in the roadmap’s foreword.

Each sector will progress through four stages – identification, consultation, design and implementation – according to the roadmap. Banking is already in stage four, while finance is at stage one.

Regulations will be introduced that ‘likely to be specific and tailored to each sector’, based on the legislative framework provided by the DPDI bill.

In respect of banking data portability, the UK is widely seen as a leading nation globally, spurred by the creation of the Open Banking Implementation Entity (now being referred to as Open Banking Limited – OBL) in 2016. But how open banking will be overseen post-OBL is yet to be finalised.

The Joint Regulatory Oversight Committee (JROC), announced in March 2022 to oversee the creation of a ‘future entity’, has today (19 April) published its proposals in a 60-page report (‘Proposals for the design of the future entity for UK open banking’).

RELATED ARTICLE UK fintech’s centre forward: a fireside chat with Ezechi Britton – a write-up of a fireside chat at the Global Government Fintech Lab 2023 with the chief executive of the Centre for Finance, Innovation and Technology (CFIT)

CFIT’s open finance leadership

In respect of financial data portability, the newly published roadmap points out that ‘work has already been undertaken by regulators and industry ‘exploring what a future open finance scheme might look like’.

The Centre for Finance, Innovation and Technology (CFIT) – launched in February 2023, backed by £5 million of government seed funding – features prominently.

CFIT is bringing together time-limited ‘coalitions’ of experts to address challenges facing the UK fintech sector and devise solutions. Its first coalition has been focused on open finance and developed use-cases, with a focus on improving ‘credit decisioning’ for small firms and automating debt advice services for consumers. CFIT published a 46-page report a couple of months ago (‘CFIT Open Finance Blueprint’).

‘The government will carefully consider CFIT’s report, alongside wider industry engagement, as it develops its strategy for open finance,’ the roadmap notes.

Economic secretary to the Treasury, Bim Afolami, announced earlier this week (15 April) at the ‘Innovate Finance Global Summit’, a conference in London organised by the UK trade association Innovate Finance, that CFIT would chair an ‘industry-led taskforce’ on open finance.

CFIT: the government-funded body took to X (formerly Twitter) during the Innovate Finance Global Summit to highlight the economic secretary to the Treasury’s announcement

Smart data-related initiatives

In respect of overarching smart data-related achievements to date, the roadmap notes that the government launched a Smart Data Council 12 months ago to ‘build momentum and direct co-ordination of future smart data schemes, including by developing practical understanding of interoperability and how to achieve it’. This has three working groups focused on: technical infrastructure; trust, compliance and consumer protection; and economic models and ‘understanding value’.

The government also developed a ‘Smart Data Challenge Prize’ identify cross-sector use-cases. An event last month (March 2024) saw ‘pitches’ for the most innovative use-case ideas, with the four best ideas awarded cash prizes.

A further ‘Challenge Prize’ competition will kick off in June, with participants to be offered access to a ‘bespoke data sandbox’ to support use-case prototyping and testing, as well as mentoring and grants to support development. A share of grants up to £750,000 (about $934,000) will be available to spend on smart data-related innovation.

The government introduced the DPDI Bill on 8 March 2023. Part three of the bill will extend the government’s ability to establish and mandate participation in smart data schemes via regulations.

Regulations will identify what data should be shared, by who (the ‘data holders’) and how the data should be shared. ‘This will be underpinned by the identification of relevant sector actors to provide enforcement, accreditation and interface functions,’ the roadmap states.