Government to introduce new fintech regulatory regime

The government will be introducing a new regulatory regime for innovative fintech firms that will change the way people engage with their finances.

Fintech firms will – at the request of the individual – be able to access data from all of their bank accounts.

This could lead to customers being able to manage all their finances at the touch of a button via an easy-to-use app. 

This will enable people to budget more effectively and help consumers avoid unwanted overdrafts by making automatic payments between different bank accounts when funds are running low.

These new changes originate from the EU’s second Payment Services Directive and aims to push innovation in fintech in the UK. 

This move will also promote competition as consumers will be able to switch to the best product for them, forcing firms to provide a better standard of product.

Stephen Barclay, economic secretary to the Treasury, said: “Thanks to the changes we’re making, new fintech firms can enter the market and offer innovative and transformative banking services that are tailored to meet people’s needs.

“New apps will empower people to take greater control over their finances.

“Whether that’s through managing all of their bank accounts in one place or helping to avoid unauthorised overdrafts when they have money elsewhere."

Stephen Jones, chief executive of UK Finance, said: “We are excited by the potential for these reforms to enhance competition and innovation in the financial services sector – and welcome the publication of these regulations which mark an important milestone on the journey towards implementing it.

“The changes will allow customers to use details of their payments to help plan and manage their money better. 

“What's more, this is just the start.

“There are a whole host of benefits for customers, many of which we are just beginning to see."

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