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On 13 October 2025, the FCA announced a partnership to accelerate the delivery of Open Finance in the UK: “We’ve been working with the industry to deliver Open Finance,” it said in a press release, “which will give people control over how they manage their money and plan their finances for the future.”
This news came ahead of the launch of the FCA’s Open Finance roadmap and strategy, which is expected to be delivered in the first quarter of 2026.
So, what exactly is Open Finance? How does it differ from Open Banking? What are the uses cases? In this instalment of Finextra’s Explainer series, we unpick recent developments in Open Finance and look at how they may unfold in the coming months.
Some key principles
According to UK Finance, Open Finance has the potential to unlock a range of innovative outcomes for both consumers and businesses – from accessing cheaper credit and boosting savings, to removing friction from within payment journeys.
Simply put, Open Finance builds on the scope of Open Banking. Where Open Banking enables third-party providers access customers’ banking data – including transaction history and account balances – Open Finance expands access to a wider range of financial data and services, including pensions, investments, insurance, and mortgages. As such, Open Banking can be seen as a subset of Open Finance, which looks to integrate all aspects of personal finance through secure data sharing.
Trusted third-party providers access – with consent – consumers’ data through the use of Application Programming Interfaces (APIs); the upshot being that the financial ecosystem becomes better connected, with consumers and businesses alike benefitting from a consolidated view of their entire financial lives, more personalised services, and greater control.
How does Open Finance work?
Open Finance works based on customer consent, meaning end-users start by handing a trusted third-party provider (such as a fintech app) permission to access their financial data, before the service in question can be extended. An example of such a service would be a pension dashboard – giving consumers a 360-degree view of their financial positions, in order to help them better plan for retirement. Since specific data is being shared, Open Finance-based services tend to be innovative and hyper-personalised.
To source the requisite data on a customer from the institution holding it, third-party providers use secure APIs, which act as digital waiters – transporting the request to the institution and returning with the order. Once secured, the third party then uses the data to deliver cutting-edge services, product comparison tools, integrated platforms, and so on.
What are the use cases and benefits?
In September 2025, the FCA launched its Smart Data Accelerator – which serves as an extension of their sandbox, facilitating the testing of various Open Finance use cases. To build the testing environment, the FCA collaborated with Raidiam, the open data sharing platform behind Open Finance and Open Insurance developments in Brazil.
The FCA has claimed that the collaboration will allow firms participating in the Smart Data Accelerator to simulate and test data sharing capabilities: “Firms will be able to develop smart data solutions that are safe, secure, and designed to benefit people and communities.”
The FCA has informed the industry that that it will be running two “sprints” between 17 November 2025 and 12 February 2026. One will focus on mortgages and the other on finance for small and medium-sized enterprises (SMEs).
Here are some of the key benefits and use cases that are expected to come of Open Finance projects – for both users and providers:
To balance the benefits with the risks, there are some trade-offs that regulators should consider. In an FCA-commissioned report on the subject, KPMG and Europe Economics identified the need for tight data sharing arrangements (and having the right technology in place to do so) as well as systems and procedures that encourage innovation, while ensuring consumers remain protected.
NatWest’s Head of Payments, Simon Eacott, explored in an interview with Finextra TV the potential impact of Open Finance business models, use cases, and developing regulation. He reasoned that the switch to an expanded Open Finance ecosystem will surely enable growth – providing the industry can ready itself for change, and meet the challenges of data security, standards harmonisation, regulatory clarity, and consumer trust.
A future of financial freedom
Thanks to its ability to better connect the financial services ecosystem, Open Finance heralds a future of greater financial freedom.
Indeed, when paired with other innovations such as artificial intelligence (AI), Open Finance could enable solutions that give AI agents autonomy to act on behalf of consumers and execute financial tasks, such as like clearing invoices – thereby outsourcing user friction. In a conversation with Finextra TV, Mastercard’s Jess Turner, executive vice president, global head of Open Finance and developer experience, underlined the potential of combining Open Finance with agentic AI, and stressed that the challenges around data governance, agentic discoverability, and consumer consent must be met.
From Open Banking to Open Finance
The last wave of Open Banking laid important groundwork to improve the accessibility and diversity of everyday banking and payments. Today, Open Finance is poised to extend these benefits to even more financial products and services. Where Open Banking was the spark, Open Finance will be the fire. What UK institutions do next will be critical.
Thanks to the initiatives explored in this article, alongside the UK government’s National Payments Vision (NPV), the country is set to become a world leader in Open Finance – a stark contrast to the United States’ fragmented, market-driven approach.
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Hamish Monk Senior Reporter at Finextra
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Hamish Monk Senior Reporter at Finextra
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Hamish Monk Senior Reporter at Finextra
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Sehrish Alikhan Reporter at Finextra
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Madhvi Sonia Head of Content at Finextra
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This content has been selected, created and edited by the Finextra editorial team based upon its relevance and interest to our community.
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What is Open Finance? – Finextra Research
