Consumer protection
What legislation is needed to ensure consumers are protected when they make open banking payments?
Jane Moore
Head of Department, Payments and Digital Assets, FCA
The establishment and expansion of variable recurring payments (VRPs) in 2025 will see the introduction of expanded consumer protections as part of open banking.
In time, the protections created for VRPs could serve as a model for, or broaden to cover, additional open banking services that would also benefit from better protections, user experience and purpose-built fraud mechanisms.
Regulation that supports the adoption of premium, commercially sustainable APIs will be a key factor as we work together with industry to deliver the continued success of open banking.
Debbie Horton
Senior Regulatory Counsel, OBL
There are already several pieces of existing legislation that protect consumers when they purchase goods and services using open banking payments. These include the Payment Services Regulations 2017 and the Consumer Rights Act 2015.
However, card payments offer additional protections (via card schemes and/or legislation) and, for open banking payments to successfully compete with cards, government, regulators and industry will have to consider if additional protections should be introduced and the best way to do that.
How can the government and the fintech industry build consumer trust and confidence in smart data schemes?
Dr Milly Zimeta
Head of Digital and Data Policy, Which?
Smart data schemes have great potential to deliver benefits such as innovation, efficiency and better consumer options across the economy - including banking and financial services. But consumer trust and confidence is critical for uptake and adoption, so the Smart Data Council invited Which? to explore “What does good look like?” for consumer trust in smart data.
We found that consumers will struggle to engage with new smart data products and services unless they understand what is happening and they trust that they and their data are protected. And if smart data schemes are developed without the right protections in place, there is a risk of consumer harm such as poor quality products and services; lack of meaningful consent; risks to consumer safety; and exploitation of vulnerable users.
Our new report, Building consumer trust and confidence in smart data, provides a blueprint for businesses and organisations participating in smart data schemes to secure consumer trust through a trust framework that fosters consumer confidence from the very start.
Government and the fintech industry can work together to adopt our trust framework principles of governance, protection and scalability, putting consumer consent and control at the centre of all smart data development.
