Finance's Final Frontier? British Watchdog Probes Data Sharing
LONDON (Reuters) - Britain’s Financial Conduct Authority (FCA) is investigating whether sharing data with outside competitors could be extended beyond banks to savings, insurance, mortgages, investments, pensions and consumer credit to increase innovation and choice.
‘Open banking’ rules already allow payment companies and other providers to use account data, with customer consent, to offer rival services and has opened the door to payments services for many financial technology or “fintech” firms.
The Financial Stability Board, a global regulatory body, has said that Big Tech companies like Google, Alibaba and Facebook could be forced to share data on financial services customers with banks and fintechs to prevent unfair competition.
Britain’s FCA said on Tuesday that going a step further with open finance could set up “dashboards” to help consumers keep an eye on their finances, encourage shopping around for better deals, and become a means to obtain financial advice.
“We want to understand what is needed to ensure open finance develops in the best interests of consumers, and what role we should play,” it said in a statement.
The FCA said there have been several instances of unfair price discrimination on longstanding consumers in general insurance, cash savings and mortgage markets.
“In each of these markets, the impact of price discrimination has been exacerbated by a lack of shopping around by some consumers. Open finance is a potential long-term solution,” the FCA said.
The British watchdog opened a “call for input” until March 2020, after which it will publish a feedback statement, and gave examples of where data could be shared: