John Penrose, the government’s competition tsar, has urged the government to move faster in enabling the safe sharing of customer data or watch global competitors “leapfrog” the UK.
Alongside a coalition of business groups – including the Payments Association and Open Banking Excellence – Penrose argued that the Data Protection and Digital Information Bill needs greater clarity to catalyse business investment in data sharing.
Although the Bill introduces provisions to improve data sharing, it does not include a timetable for how fast changes will be introduced.
This means the UK is at risk of falling behind global competitors, despite it being one of the earliest adopters of open banking.
Penrose warned that “other countries are trying to leapfrog and overtake us. If they succeed, all those juicy global opportunities will happen somewhere else instead.”
“We need firm implementation plans and timetables from ministers right away, so businesses can get cracking,” he continued.
He pointed to the world leading success of the UK’s open banking regime, which has given customers cheaper and more effective services.
Open banking forced high street lenders to open customers’ data to trusted third-party firms. Lenders could then use this data to perform accurate real-time affordability checks and make more informed decisions on customers.
Since its launch, it has garnered over seven million customers of which 750,000 are small or medium-sized businesses.
Penrose argued that the same principles could be applied to a range of other sectors. “We’ve got a golden opportunity to repeat the same, world-leading success in lots of other industries too, from online retailing, to energy or even better healthcare too,” he said.
Although some have expressed concerns about the risk that the increased sharing of data may harm consumer privacy, Ghela Boskovich, head of Europe at the Financial Data and Technology Association said the proposals would actually improve it.
“We already share our data, but not always in the safest, most secure, or insured manner,” she said.
“This legislation makes security and privacy a core principle in how we share data going forward. The entire point of setting up this regulation is to ensure that data sharing is done under the highest security and privacy standards currently available”.
The reforms could have a particular impact in a cost of living crisis when consumers are already struggling to pay the bills.
Penrose said sharing data could mean “cheaper services and better deals” for consumers. “At a time when money is tight and the cost of living is high, that’s a huge help for all of us,” he concluded.