What is Open Finance?

Open Finance will soon extend the principles of Open Banking to all major financial products, including:

Savings
Investments (including crypto & crowdfunding)
Asset & Fund Management
Pensions
Mortgages & Debt Agreements
Credit Agreements & Ratings
Insurance and Reinsurance (exceptions for health insurances, due to GDPR)

Together, these categories represent the aggregated financial picture of a client or entity, supporting the KYC, suitability, financial planning & assessment processes.

What the Regulation Will Require

Under the regulation, financial institutions will be mandated to:

Build APIs for institutional, business and personal accounts and products
Provide consumers with a client-centric permissions dashboard allowing them to view, manage, share, and revoke access to their financial data in real time

The data standards, now in the final stages of agreement, are expected to include at a minimum:

Full transaction history
Fees and charges
Account holdings
Product terms
Beneficiary details

Benefits for Consumers

For consumers, they will benefit from:

Faster, more accurate and personalised advice
More confident decision making
Products that are better understood, more transparent and competitive

Impact on Advisors

For advisors, Open Finance is not just a regulatory concept, but a material change that will reshape:

How advice is delivered
How quickly they respond to clients
How efficiently firms operate

Timeline and Compliance

From the date of the announcement, providers are expected to have 18 months to build their APIs, implement a compliant solution, and connect to at least one third-party provider (RAISP, AISP, or FISP), for example, Finerty.

After 24 months, providers that remain non-compliant will face fines of up to 2% of turnover.

Entities in Scope

Banks
Investment Firms
Pensions Providers
Insurance & Reinsurance
Fintech
Wealth Management Firms
Credit Rating Agencies
Crowdfunding
Crypto Firms
Fund / Asset Management