Originally introduced to the UK Parliament by the previous Conservative government, the Digital Information and Smart Data Bill has been taken forward by the current Labour government, with the legislation currently at the Committee stage in the House of Lords.
The DISD Bill will be aimed at bolstering access and the sharing of data in general to benefit public services and public protection. The Bill looks to support the creation and adoption of trusted digital identity products and services from certified providers to help with matters like pre-employment checks and buying age-restricted goods and services.
In addition, the legislation will look to securely share customer’s data upon their own request, with authorised third-party providers. It will also look to create an electronic system for the registration of births and deaths and apply information standards to IT suppliers in the health and social care system.
Beyond its general impact on the digital and data trail of the population, there is an area where this bill will also have a huge effect – in the area of digital finance.
In the words of South African RegTech firm RelyComply, putting financial powers back into customers’ hands is a large reason digital finance exists. “Financial houses have been slowly adopting the move to customer-first platforms through apps or by making their onboarding much simpler. Letting customers run free with their data, with varying levels of digital capability, could be a worry in the hugely connected world open finance offers. But greater regulation in the sector should make it take off,”
Open finance – a growing trend globally – has been one of the UK’s particular ‘golden paths’ for digitalisation, with the UK being championed for letting customers share their data and connect various products across sectors all in one platform.
“While there’s been a delay for its proposed DISD Bill (which looks to strengthen legal frameworks around data sharing), I think the UK’s ongoing status as a central focal point for open finance can only be a good thing to influence global innovators, from FinTechs to energy companies and so much more,” said RelyComply.
The reason for this, the firm outlined, is threefold. “On the one hand, establishing standards for data privacy – something getting increasingly strict around the globe – lies with the watchdogs themselves.
“The bill looks to give more control to the UK’s data regulator, the Information Commissioner’s Office (ICO), and highly specialised data researchers. This has knock-on effects for maintaining transparency between financial companies and consumers around how their data is used, improving the public’s uptake in embracing open banking concepts.”
Secondly, the DSID Bill has put forward initiatives to boost the services of digital verification providers. ‘When biometrics can better facilitate safe onboarding and reduce the threat of AML, it’s a positive for banks and FinTechs and establishes trust in the customers.
“On top of this, greater reassurance in digital finance platforms allows people to gain centralised control over their current accounts, insurance claims, personal savings, and pensions, meaning that financial education and inclusion are established in ways that people feel comfortable with,”
RelyComply also outlined that when services such as banking and finance are improved and made more available through open and regulated data sharing, there are no limits to where RegTech products can enhance experiences for both customers and business.
“The UK has the opportunity to road test and spearhead a global open finance movement, and it can be a winner for data compliance well beyond its borders,” RelyComply concluded.
Smart data model expansion
Meanwhile, Allison Lagosh, head of compliance at Saifr, said that the DSID bill is poised to have a positive impact and expanded scope on the finance sector and open banking.
She said, “This legislation seems designed to pave the way for the smart data model to be used in more sectors, as well as finance including energy or retail. Ideally, customers could compare prices between energy or retail providers, for example, allowing them to find better deals and boosting competition and ultimately the UK’s economy.
“This ultimately widens the net for the protection of smart data and enables the usability of more data for the consumer,” Lagosh concluded.
Keep up with all the latest FinTech news here
Copyright © 2024 FinTech Global
Copyright © 2018 RegTech Analyst
