The Financial Conduct Authority (FCA) is committed to publishing its roadmap for open finance deployment within one year with its new five-year strategy launched today (March 25th).
The FCA confirmed it expects the first open finance scheme “regulatory foundations” to be introduced by the end of 2027, saying it will prioritize lending for small and medium-sized enterprises that “these growth engines can improve access to capital.”
The FCA has repeatedly made its commitment to prioritizing the development of payments from accounts to trades through its five-year strategy.
Based on regulatory promises made to the Prime Minister and Prime Minister in January, it intends to increase “competition and choice” of 2025 repeat payments (VRP) and develop open finance.
The FCA’s new strategy, which will take place by 2030, focuses on four areas, including improving its processes and adopting technology, becoming more efficient and effective, supporting the UK’s “sustainable” economic growth.
We also work with the industry to encourage trust and product innovation, ensuring that appropriate information is available to consumers to make financial decisions.
Finally, the FCA is also committed to combating financial crime, focusing on “people who try to use the fact that they are regulated to cause harm.”
Prime Minister Keir Starmer recently announced that the Payment Systems Regulatory Authority (PSR) will be abolished and “integrated” into the FCA.
The FCA says it will “provide a national payment vision for the innovative, secure and competitive payment sector” as it integrates PSR with its capabilities in its five-year strategy, and “based on the success of open banking and launch of open finance.”
Nikhil Rathi, CEO of FCA, said: “Our final strategy sets high standards and strengthens operational effectiveness. We will go even further and provide it at a pace to meet the scale of change we are facing over the next five years.
“This strategy sets our priorities: how we can make choices that make us more efficient and effective and shape the financial system.”
Rathi added: “Our four priorities are strengthened against each other, becoming smarter regulators, supporting growth, supporting consumers, and fighting crime.”
Industry reaction
“We are pleased to announce that we are committed to providing a range of services to our team,” said Charlotte Crosswell, Chairman of the Center for Finance, Innovation and Technology (CFIT).
“It’s great that the FCA promises to release a roadmap for open finance deployment within 12 months. Creating a single, multi-year open finance roadmap has been one of the key recommendations in the report.
She added that regulators’ focus on small business lending to promote growth “is closely aligned” with the proof of concept built by CFIT’s Open Finance Coalition.
Innovate Finance CEO Janine Hirt has called the FCA’s new five-year strategy, “The UK Financial Services and Fintech ‘milestone’.
“We recognize the role that innovation plays in supporting consumers, promoting growth, combating crime and enabling smarter regulations. We are delighted to see innovation woven across our strategy,” Hart said.
She added: “This strategy supports three strategic priorities identified in the government’s Fintech plan last year: the smart data revolution and the open finance roadmap, a technology-positive regulator that supports the next generation of innovation, and action to tackle fraud.”
