Open Finance
AdvancedOpen finance is the extension of open banking to a wider range of financial products, allowing customers to securely share data from savings, investments, pensions, mortgages and insurance with authorised third parties, with their consent.
Open banking lets customers share data from their payment accounts, such as current accounts, with authorised apps and services. Open finance goes further, covering more types of financial products.
The aim is to give consumers a complete view of their finances, and to encourage competition and innovation. For example, a customer could use a single app to see their bank accounts, pension, investments and mortgage together, receive advice on whether they are saving enough for retirement and compare insurance offers based on their actual data.
Several jurisdictions are developing open finance frameworks. The European Union has proposed rules on financial data access, the United Kingdom has been developing its approach following its open banking programme, and countries such as Brazil and Australia have broadened their data-sharing systems.
Open finance raises important questions about data security, privacy, liability when things go wrong and ensuring that customers genuinely understand what they consent to. Its success depends on strong standards and trust.
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