By Bradley Elliott, CEO, RelyComply

 

On a rainy Saturday in January 2018, Open Banking made its debut to little fanfare, yet was determined to make a difference to the lives of consumers and small businesses.

Industry reaction and sentiment have been mixed, and at times hostile. Some hailed it as a success, others have been more vocal about seemingly slow progress. Whichever side of the fence you are on, what matters now is that the UK financial landscape is on the brink of its next major evolution: Open Finance.

The implications of the one-word-change may seem insignificant, and while many mutuals viewed Open Banking as a challenge primarily for retail banking giants, Open Finance expands the playing field significantly. With a phased introduction not fully in the calendar until 2030, it’s time to give Open Finance the welcome that Open Banking never got.
 

Open Banking vs. Open Finance

Open Banking allows consumers to securely share their current account transaction data with regulated third parties (many of which are FCA approved fintechs) via APIs (Application Programming Interfaces). Open Finance is the logical extension of this concept. It widens the scope to encompass a consumer’s entire financial footprint, unlocking access to data from savings accounts, mortgages, pensions, insurance policies, and investments.
 

How we got here: the Regulatory Journey

 

• 2017 Payment Services Regulations (PSD2)  2018 Open Banking launch (CMA mandate for ‘CMA 9’)2025 Data Use and Access Act (DUAA) gained Royal Assent -  established the statutory framework for wider smart data schemes.

The FCA Open Finance Roadmap timeline:

• 2026: Focuses on cross-industry collaboration and selecting priority use cases via the FCA’s Smart Data Accelerator.
• 2027: The FCA, alongside HM Treasury, will finalise the long-term regulatory and commercial design framework.
• 2028–2030: A phased rollout will scale sustainable, interoperable Open Finance schemes across the wider economy.

This year, the FCA’s Head of Innovation spoke to a gathering of mutuals encouraging them to explore the Smart Data Accelerator which focuses on cross-industry collaboration and selecting priority use cases. The CEO of OBL (Open Banking Ltd) spoke at the same event, encouraging attendees to be pro-active and not to wait on the sidelines. Over the next 12 months, the FCA, alongside HM Treasury, will finalise the long-term regulatory and commercial design framework for interoperable Open Finance schemes are planned to rollout over 2028-2030  https://www.fca.org.uk/publications/corporate-documents/open-finance-roadmap
 

So why should we care?

For mutuals, Open Finance is not just a regulatory development. It has direct implications for deposits, product design, member relationships and competitive positioning:

1. Potential impact on margins and deposits

Building societies enjoy the loyalty of member engagement and member deposits. Under Open Finance, 3rd-party balance-sweeping tools could conceivably automatically identify better interest rates and seamlessly migrate funds to higher-yield competitors in real time. Robust API layers to track fluid liquidity risks, and prevent sudden and significant deposit outflows, should be a priority.

2. Personalised, multi-asset product creation

The permissioned availability of holistic customer data will put pressure on generic mortgage and savings products. The opportunity to view a member's complete portfolio means that mutuals can deploy automated, hyper-personalised underwriting models, which in turn allow for the design of flexible, blended products tied directly to a customer's broader financial habits.

3. Seamless, frictionless member journeys

Manual document submissions may become increasingly rare as  Open Finance enables instant, digital verification of income, outgoings, and creditworthiness. Mutuals that embrace this technology will deliver rapid, stress-free onboarding experiences that preserve their signature customer-centric identity in a digital-first ecosystem.

The bottom line is simple: don’t wait to play catch up with Open Finance. Mutuals, which have often been first movers in customer-centric innovation, will play an important role in the success of this next evolution, so make it an immediate strategic priority rather than a distant compliance requirement.