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The UK government has released its roadmap for the implementation of Smart Data into the country’s economic framework, underpinned by the Data Protection and Digital Information (DPDI) Bill.

Five priority sectors will be targeted during the government-coordinated roadmap – banking, finance, energy and road fuels, telecommunications and transport. Payments will play a central role in this, particularly in the case of the first two sectors, and will also be heavily impacted by it moving forward.

In addition to the DPDI Bill, the government has also launched the Smart Data Council and plans to launch a Smart Data Challenge Prize, to better work towards implementation of Smart Data across the five sectors.

The Smart Data Council has been tasked with building momentum and direct coordination of future Smart Data Schemes, whilst the Prize – once developed – will be used to identify cross-sector use cases from across the economy.

Kevin Hollinrake, Minister of State for Enterprise, Markets and Small Business, said: “The government has today published a Roadmap which sets out what action it will take over the coming year to progress a Smart Data economy as a result of the new powers in the Data Protection and Digital Information Bill.

“The data economy is a large and growing part of the economy. Smart Data unlocks data for individuals and businesses that is currently held and underutilised in a small number of existing companies. 

“It allows businesses to easily access this data, with consumers consent, to provide new services that drive investment, productivity, competitive outcomes and ultimately economic growth.”

Finding interoperability will likely be a key area of focus for the government as it moves ahead with its Smart Data roadmap, referenced by the scheme’s intention to find cross-sector use cases.

Regardless of sector, Smart Data adoption will follow the same rollout pattern. The first two are identifying how Smart Data will impact competition and empower consumers. followed by consultation, whereby government departments will work with sector stakeholders on potential design of a Smart Data scheme.

The third stage is the scheme design phase, and whether or not a sector is moved onto this part of the roadmap will depend on the conclusions to the consultation phase. The government stressed that the launch of a consultation does not mean that a scheme will be implemented.

At the centre of the government’s plans for Smart Data in finance and banking is Open Banking, and by extension Open Finance. Authorities hope to build a framework that is scalable and adaptable to future technologies by designing Open Banking regulations and the DPDI legislation.

Regarding Open Banking, the government has highlighted the Consumer Data Right in Australia as a model to follow. The government believes that this proves how schemes can start from the basis of a Minimum Viable Product (MVP) with a limited number of open data sets.

The policy document explained: “At scheme implementation stage, it may be that only a small number of data sets are in scope for each scheme. Where appropriate, schemes may set out a timetable for when additional data sets will need to become available. 

“In the case of Open Banking, this began with an initial API, before personal customer transaction data was included, initially on a read-only basis. The full scope, including business, customer and transactional data, followed later.”

The government’s desire for greater use of Open Banking, and the Smart Data that will underpin this, has been made clear over the past year. The Future of Payments Review notably laid out recommendations for policymakers to follow, and the government has begun to build on this.

Last week, Bim Afolami MP, the Economic Secretary to the Treasury, announced that the  Centre for Finance, Innovation and Technology (CFIT) would head up a task force to implement Open Finance in the UK.

The Joint Regulatory Oversight Committee (JROC), meanwhile, is also examining how it can move ahead with Open Banking. Government officials, alongside  MPs, believe that the UK has secured a leadership position globally in Open Banking.

This position is being challenged, however, by the likes of Australia, the US, EU and others, and MPs are keen for the UK to strengthen its resolve. In a speech at Pay360 last month, John Penrose MP emphasised the significance of the DPDI Bill to this, as did Riccardo Torreda-Ricchi in an interview at the event.

Hollinrake summarised progress: “The Data Protection and Digital Information Bill was introduced to the House of Commons in March 2023 and passed Second Reading in the House of Lords on 19 December 2023. 

“The Bill will provide the government with the powers it needs to deliver the benefits and safeguards required for a Smart Data economy, including the ability to mandate industry involvement in Smart Data schemes.

“The roadmap sets out how the government will use these powers over the coming year by identifying the opportunities and challenges in implementing Smart Data schemes in seven sectors: energy, banking, finance, retail, home-buying, transport and telecoms.”