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The Financial Conduct Authority (FCA) plans to accelerate the UK’s transition from open banking to open finance, potentially unlocking a more efficient and competitive market.
Announcing the initiatives, the regulator said they represent a major step towards its open finance roadmap and strategy, scheduled for publication by March 2026.
This follows the FCA’s January letter to the UK Prime Minister on economic growth, which outlined its commitment to “use our powers to develop open finance,” with a potential focus on supporting small and medium-sized enterprise (SME) lending.
Smart Data Accelerator partnership
The FCA said it has launched a Smart Data Accelerator, an extension of its regulatory sandbox, to test real-world use cases of open finance. The accelerator will allow firms to trial data-sharing solutions in a secure environment.
As part of the initiative, the FCA has partnered with Raidiam, a UK-based firm whose technology has supported open finance and open insurance frameworks in Brazil. Through this collaboration, participants will gain access to Raidiam’s testing environment to simulate and validate data sharing in practice.
The regulator said this would enable firms to develop “smart data solutions that are safe, secure, and designed to benefit people and communities.”
In support of the initiative, the FCA also commissioned KPMG and Europe Economics to assess the potential benefits of open finance for consumers and the wider financial services sector.
Their report highlights that although open banking has made payments and banking more accessible, open finance could extend these benefits to a broader range of financial products.
However, it also notes that regulators will need to manage trade-offs around data sharing, technology readiness and consumer protection.
Two TechSprints announced
The FCA will run two TechSprints between November 17, 2025 and February 12, 2026, one focusing on the mortgage sector and the other on SME finance.
Registration is open until November 2 for firms, policymakers and international partners wishing to participate.
The announcement follows the FCA’s earlier “Open Finance Sprint”, held in March 2025, which brought together regulators, fintechs, technology firms and consumer groups to explore practical applications of open finance. The outcomes were published in July.
A strategic move for the FCA and the market
The announcement is a strategic move for both the FCA and fintechs operating, or planning to operate, in the UK’s data-sharing and embedded finance ecosystem.
It signals how the regulator intends to transition from open banking to a broader open finance framework, and how firms can engage early.
Fintechs should engage early through the TechSprints and the new Smart Data Accelerator.
These are not merely experimental sandboxes; they serve as testing grounds for the open finance framework the FCA will later formalise.
Participation gives firms early insight into the FCA’s expectations on key topics such as data governance, interoperability and consumer outcomes.
Firms should also align their products with open finance use cases.
The FCA’s initial focus on mortgages and SME finance is significant, particularly given the opportunities it could create for stakeholders such as homebuyers.
Fintechs looking to operate in these sectors should explore how shared financial data can streamline credit assessments and enable personalised financial planning or lending. They could also develop multi-provider dashboards or advisory tools.
There is also a clear opportunity for firms specialising in aggregated data analytics, identity verification and API infrastructure to deliver enabling technology.
For the FCA, too, there are several drivers at play.
The Treasury and the regulator will be keen to ensure that the UK remains competitive globally, particularly as the EU advances with the updated Payment Services Directive (PSD3) and open finance legislation, and as countries such as Brazil move quickly on implementation.
The latest developments could strengthen the UK’s global position in financial services. With growing international interest in data-driven finance to enhance inclusion and efficiency, a robust regulatory framework can help ensure the UK remains a hub for digital finance innovation, rather than mere compliance.
Open finance is also a way to show that the government is delivering for consumers and boosting competition, especially for SMEs facing barriers to credit from traditional lenders.
Moreover, it could reshape the mortgage market in the UK, making homebuying smoother for consumers. Open finance could make the mortgage market more competitive and inclusive by enabling secure data sharing between consumers, lenders and brokers.
Access to real-time financial data would allow comparison tools to analyse an individual’s full profile, recommending the most suitable mortgage rates and repayment options. This would help borrowers make better-informed decisions and incentivise lenders to offer more competitive deals.
Transaction-level insights would also enable lenders to assess affordability more accurately, considering regular spending, savings habits and variable income, which would be a particular benefit for the self-employed, for example.
Ultimately, if the FCA balances innovation with safety to establish an effective regulatory model, it could unlock an efficient, competitive market that fosters further innovation in consumer finance.
