The U.K.’s gross domestic product (GDP) is headed for a significant boost thanks to recent Open Banking legislation, according to analysis from the Centre for Economics & Business Research.
The report in London Loves Business, announced by online review platform Trustpilot on Monday (Feb. 26), estimated Open Banking will contribute $1.4 billion to the nation’s GDP on an annual basis. The rules, which facilitate data sharing between financial institutions and third-party FinTechs, are also expected to add 17,000 new jobs in the U.K.
Reports noted separate analysis from Accenture that warned as much as 69 percent of the U.K. population may not consent to the sharing of their financial data. This signals limits to Open Banking’s ability to have a positive impact on the overall economy, as well as the challenge faced by financial services players to gain public trust.
“By giving customers the choice to provide their financial data to third parties, Open Banking is set to unleash significant innovation across U.K. financial services,” said Trustpilot Senior Vice President Glenn Manoff. “The new standards will also increase competition and remove information barriers as a plethora of new FinTech players access the data necessary to provide compelling new services.”
Manoff pointed to Accenture’s research as a potential roadblock to this trend, though. “As research from Accenture demonstrates, the industry will need to work extremely hard for the £1 billion [$1.4 billion] annual GDP benefit to be fully realized by demonstrating that consumers can trust them with their banking data,” he continued.
Open Banking came into effect in the U.K. earlier this year as part of the EU’s broader PSD2 regulations, which address data sharing and protection. While the market had been gearing up for the rules for some time, several top lenders in the U.K. missed key deadlines, with HSBC, Barclays, RBS, Santander and the Bank of Ireland all requesting more time to comply with the rules and ready their application programming interfaces (APIs) that facilitate data sharing.