# Britain seeks to boost banking services from fintechs Author: Pal Sinha, Barnali Author URL: https://financedigest.com/author/pal-sinha-barnali Published: 2023-04-17 Category: NEWS Category URL: https://financedigest.com/category/news Meta Title: Britain Boosts Banking Services Through Fintechs Meta Description: Discover how UK regulators plan to enhance banking services through third-party fintech apps, promoting competition and expanding open banking benefits. URL: https://financedigest.com/britain-seeks-to-boost-banking-services-from-fintechshtml ![undefined](https://prod.superblogcdn.com/site_cuid_cm5qst7v3003gwirgwqtxn8i8/images/2023-04-17t093740z1lynxmpej3g08krtroptp4britain-banks-1736814136072-compressed.jpg) # Britain seeks to boost banking services from fintechs By Huw Jones LONDON (Reuters) – Britain’s financial regulators said on Monday they would set up a new body over the next two years to encourage more competition in banking services through the use of third-party apps from fintech firms. Open banking refers to third-party firms using banking data from customers at mainstream lenders to offer tailored services such as lending or payments, a sector that has helped to turn Britain’s fintech sector into the world’s third largest with 2,500 companies. Open banking, currently used by about 7 million consumers and businesses, was [launched by an order from Britain’s Competition and Markets Authority in 2018 requiring nine banks to share](https://www.financedigest.com/abb-to-launch-1-billion-share-buyback-on-april-3.html "ABB to launch billion share buyback on April 3") data with outside companies, if customers give permission. Regulators now want to move to the next stage of setting up a long-term [body to help boost uptake of open banking](https://www.financedigest.com/britains-digital-banks-need-support-amid-banking-turmoil-trade-body.html "Britain’s digital banks need support amid banking turmoil – trade body") and widen it to other parts of the economy – and help London flourish as a global fintech centre post-Brexit and help provide more company listings to compete with New York and EU financial centres. We will also work with open banking participants over the next few months to undertake further analysis of the options for the structure, governance and funding of the [future entity,” the Financial](https://www.financedigest.com/the-future-of-financial-services-tech-evolution-not-revolution.html "The future of financial services: Tech evolution not revolution ") Conduct Authority and Payment Systems Regulator said in a joint statement. While significant progress has been made, there is more to be done to deliver the full benefits of open [banking within retail banking markets](https://www.financedigest.com/hsbc-appoints-new-markets-head-amid-wider-investment-bank-reshuffle.html "HSBC appoints new markets head amid wider investment bank reshuffle"), and beyond,” the statement said. The recommendations from [regulators will keep up momentum in open banking](https://www.financedigest.com/exclusive-u-s-regulator-seeks-sale-of-silicon-valley-bank-signature-bank-portfolios-sources.html "Exclusive-U.S. regulator seeks sale of Silicon Valley Bank, Signature Bank portfolios-sources") and extend its benefits to other sectors, said Marion King, chair of Open Banking Limited, which checks on whether the nine banks comply with open banking rules on customer data. Britain is keen to push open banking to the next stage following Brexit to attract more fintechs to set up in Britain as the [European](https://www.financedigest.com/dollar-outshines-euro-sterling-amid-european-bank-jitters.html "Dollar outshines euro, sterling amid European bank jitters") Union is poised to compete with its own version of open banking. It’s rare that legacy [firms have the ability to innovate at the pace required to make the most of changing](https://www.financedigest.com/uk-watchdog-warns-crypto-firms-to-prepare-for-advertising-rule-change.html "UK watchdog warns crypto firms to prepare for advertising rule change") technology and to keep us internationally competitive,” Britain’s financial services minister, Andrew Griffith, told UK fintech industry body Innovate Finance’s annual conference. The data protection draft law, now going through parliament, will be used to [put open banking](https://www.financedigest.com/boes-bailey-says-rate-setters-can-put-inflation-before-bank-worries.html "BoE’s Bailey says rate-setters can put inflation before bank worries") on a sustainable footing, Griffith said. The regulators said the UK fintech [sector is successfully leveraging open banking](https://www.financedigest.com/big-ecb-hike-adds-fuel-to-the-banking-sector-fire.html "Big ECB hike adds fuel to the banking sector fire") technology, but industry officials on Monday warned government and regulators against complacency. This will be the year of delivery on next generation of [open banking](https://www.financedigest.com/barclays-private-bank-opens-new-office-in-verbier-switzerland-for-2022-23-ski-season.html "Barclays Private Bank opens new office in Verbier, Switzerland for 2022/23 Ski Season"). We won’t rest on our laurels,” Griffith said. Britain’s fintech sector ranks third after the United States and China, with [investment in UK fintech totalling $12.5 billion](https://www.financedigest.com/shell-to-evaluate-25-billion-pound-british-investments-after-windfall-tax.html "Shell to ‘evaluate’ 25 billion pound British investments after windfall tax") last year, said Chris Hayward, policy chief at the City of London Corporation, which administers the capital’s financial district. Global competitiveness is the [name of the game](https://www.financedigest.com/automation-is-the-name-of-the-game-in-fintech-in-2022-and-beyond.html "Automation is the name of the game in fintech in 2022 and beyond") now,” Hayward said. Industry officials said upcoming tougher consumer [protection in Britain must](https://www.financedigest.com/brexit-why-investors-must-now-think-global-to-maximise-and-protect-wealth.html "BREXIT: WHY INVESTORS MUST NOW ‘THINK GLOBAL’ TO MAXIMISE AND PROTECT WEALTH") not hobble fintech players. We now need to see proportionate regulation,” said Janine Hirt, CEO of Innovate Finance, the UK fintech [industry body](https://www.financedigest.com/airline-body-iata-sees-industry-recovery-now-in-2023.html "Airline body IATA sees industry recovery now in 2023"). (Reporting by Huw Jones; Editing by Jason Neely, Mark Potter and Christina Fincher) --- This blog is powered by Superblog. Visit https://superblog.ai to know more. ---