Government assessing benefits of data-sharing and open data in banking
Government wants more competition in banking and better deals for customers as it aims to support growth of UK 'fintech' sector
The government has launched a call for evidence on the benefits of greater data sharing and use of open data in banking, in an attempt to support the growth of the UK's financial technology sector.
The government said using open data could lead to more competition in banking and better deals for customers.
Whitehall wants to create a freely-accessible standard for developing software that enables customers to share their bank data with other products or services they use, so that they can benefit from easier ways to pay or special offers, for example.
It said that these APIs would allow two separate apps to communicate and exchange information in a secure way.
For example, a developer could make an app for a smartphone that uses a customer's GPS data and bank data to provide advice on what products and services that customer may like to buy or use in any given area. This would mean that if a customer had a set budget for any given month, and had already reached their limit, they would be advised not to buy a coffee - even if it was on offer.
The ultimate aim is to encourage banks and financial technology firms to work together to devise new ways to use bank data that will ultimately benefit users.
City minister Andrea Leadsom said she was "delighted" to call for evidence on data sharing and open data in banking.
"Greater use of data could help customers by letting them know whether they could save money by moving their bank account," she said.
"Greater use of data is also about making banks work harder to win customers' business through enabling new providers to enter the market more freely," she added.
The government is calling for views from the general public, financial technology firms, app designers and the financial services industry.
The call for evidence will run for a period of four weeks, at the end of which the government said it would consider respondents' views and determine the best way to enable data-sharing for customers, the financial services sector and financial technology firms.