The UK Centre for Finance, Innovation, and Technology (CFIT) is set to develop two operational prototypes of open finance applications aimed at providing financial guidance to vulnerable consumers and expediting credit assessments for SME loan applications.

This initiative builds on previous proofs of concept conducted in collaboration with Citizens Advice and HSBC, to lay the groundwork for wider adoption of open finance across the UK’s financial services sector.

The initial proof of concept with HSBC for SMEs showcased that accessing new datasets and automating business loan applications could significantly enhance SME lending decisions. CFIT’s findings reveal that a quarter of businesses from a sample of SMEs, whose loan applications underwent manual underwriting, could potentially secure financing with the implementation of open finance. Additionally, it could reduce the number of SMEs abandoning their applications.

For the operational prototype, CFIT invites other SME lenders, including Barclays, to join forces on a project that could potentially address a £22 billion funding gap for UK SMEs.

Barclays Bank is collaborating with CFIT on initiatives to enhance support for vulnerable consumers, enabling Citizens Advice client teams to leverage open financial data to provide more comprehensive advice to those grappling with debt and financial concerns.

This effort builds on a previous dashboard developed by CFIT and Citizens Advice, demonstrating how allowing CA clients to seamlessly share their financial data could offer tailored financial advice to 40% more consumers facing financial difficulties, supporting an additional 150,000 individuals annually.

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Jason Turner, director of open banking at Barclays Bank, remarks on Barclays’ role in the CFIT Taskforce, stating: “The business and consumer landscape is evolving rapidly, and cross-industry technology will be crucial in meeting their changing needs.”

CFIT CEO Ezechi Britton said: “CFIT, established in 2023 with a mandate to enhance the UK’s fintech sector and deliver benefits for consumers and SMEs, is proud to announce progress on this mission through industry-led partnerships that translate Open Finance proofs of concept into operational prototypes in selected areas of the UK.”