The group of British MPs calls for the government to broaden its open banking model to facilitate fintech growth
The Challenger Banking APPG is requesting the UK government to instigate a new “Big Bang”, referring to the 1980s deregulation of financial markets. While many digital challengers enter the British market, competition is still stifled by “regulatory intransigence”, says a report from the All Party Parliamentary Group (APPG).
Therefore, the group argues that removing fintech restraints can level up the agenda for reducing economic imbalances within the country. Current restrictive practices promote the dominance of the big five national banks.
Specifically, the report calls to allow open banking to offer a view of individuals’ financial situation. In addition, the regulator should establish a system similar to Financial Services Compensation Scheme for those fintechs that offer consumer access but cannot offer fund protection under the existing FSCS model.
Another suggestion is for banks to offer their branches to challengers before closing them. Thus, the government may offer financial incentives to these challengers to open brick-and-mortar branches.
Finally, the report recommends including financial education in primary and secondary school curriculums.