The UK is positioning itself as a global leader in responsible digital innovation with a new regulatory approach to open finance and smart data. The Financial Conduct Authority (FCA) and the Information Commissioner’s Office (ICO) have published a joint article via the Digital Regulation Cooperation Forum (DRCF), setting out their shared vision for extending open banking principles across the wider financial ecosystem.
At the heart of the strategy is a commitment to secure, consent-based data sharing, underpinned by the recently enacted Data Use and Access Act 2025 and the UK Smart Data framework. These reforms aim to give consumers greater control over their personal data while enabling competition and innovation across sectors.
The ICO’s role is central to ensuring that privacy and data protection remain core to open finance’s evolution. The regulators underscored that any expansion must maintain public trust, particularly as emerging technologies—such as APIs, artificial intelligence, distributed ledger technology and digital identity verification—become increasingly integrated into digital services.
To help firms navigate this evolving environment, the ICO will issue a statutory code of practice on AI use, building on existing guidance. The FCA and ICO’s joint insights reaffirm their intention to support responsible deployment of these technologies, including through the AI and Digital Hub—an initiative offering bespoke advice to innovators developing data-intensive solutions.
Digital identity is another pillar of the strategy, with the Department for Science, Innovation and Technology leading the UK Trust Framework. This government-led scheme will establish national standards for identity verification, crucial for secure data sharing across sectors.
The FCA and ICO also highlighted their commitment to cross-sector collaboration, working closely with government departments and industry partners to support Smart Data Schemes. These schemes, enabled by the new legislation, facilitate safe data sharing between organisations and authorised third parties to unlock economic growth and service innovation.
This regulatory alignment forms part of the UK government’s wider data reform agenda, which includes a refreshed advisory board for the Centre for Data Ethics and Innovation (CDEI). The CDEI will play a key role in guiding trustworthy applications of data and AI, ensuring that ethics and legality remain embedded in innovation.
The FCA and ICO’s coordinated approach reflects an optimistic and practical response to the growing demand for clear rules around AI, data governance and digital financial services. Their roadmap sets a strong precedent for how innovation and regulation can advance together, balancing opportunity with accountability.
As open finance expands and smart data becomes more embedded in everyday services, the UK’s integrated regulatory model may serve as a global benchmark—ensuring progress is built on a foundation of trust, transparency and consumer empowerment.
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