A Digital Information and Smart Data Bill has been announced today as part of the new UK government’s programme of legislative priorities.

The bill is among 39 bills presented in the King’s Speech (17 July), which sets out the Labour administration’s parliamentary agenda and kicks off a new parliamentary year.

It will be keenly followed by those within and outside the public sector with an interest in capitalising on the possibilities of financial technology, and arrives after a previous Data Protection and Digital Information (DPDI) Bill hit the buffers during the pre-general election ‘wash-up’ period (the final few days of parliament before its dissolution).

The DPDI Bill would have provided the legal backbone for the rollout of smart data (data portability) programmes, and had been largely championed by many providers of fintech-enabled services. As of today they are pinning their hopes on its successor legislation – the DISD Bill, to award it an initialism – which industry representative bodies have welcomed.

Sir Keir Starmer led the Labour Party to a widely expected triumph the 4 July general election, ending 14 years of Conservative Party rule, with smart data and open finance among the UK fintech sector’s priorities for the new administration.

RELATED ARTICLE Smart data and open finance among UK sector’s priorities for Labour government – a news story (5 July 2024) on the UK fintech sector’s priorities on the first day of the new Labour government

Bill’s overarching aims

The Department for Science, Innovation and Technology will be the lead department on the DISD bill, according to a 105-page 2024 Kings Speech government document published today.

The bill is, the summary document states, aiming to ‘enable new innovative uses of data to be safely developed and deployed and will improve people’s lives by making public services work better by reforming data sharing and standards; help scientists and researchers make more life enhancing discoveries by improving data laws; and ensure data is well protected by giving the regulator (the Information Commissioner’s Office) new, stronger powers and a more modern structure’.

The document refers to the establishment of ‘smart data schemes’, which it defines as ‘the secure sharing of a customer’s data upon their request, with authorised third-party providers’.

Also in the fintech ballpark (and also, in effect, revived from the DPDI Bill) is the proposed establishment of ‘digital verification services’ to ‘make people’s everyday lives easier through innovative and secure technology’. The government will ‘support the creation and adoption of secure and trusted digital identity products and services from certified providers to help with things like moving house, pre-employment checks and buying age-restricted goods and services’.

The enablement of ‘more and better’ digital public services ‘by making changes to the Digital Economy Act’ is also referenced.

RELATED ARTICLE UK government to boost fiscal watchdog and nationalise railways – a news article on today’s King’s Speech (17 July 2024) from our sister title Global Government Forum

Open banking: only ‘active example’

‘Smart data is the secure sharing of customer data, upon the customer’s (business or consumer) request, with authorised third-party providers (ATPs) who can enhance the customer data with broader, contextual ‘business’ data,’ the government notes today. ‘These ATPs provide the customer with innovative services to improve decision making and engagement in a market’.

It identifies open banking as the only ‘active example’ of a regime that is comparable to a ‘Smart Data scheme’ but adds that it (open banking) ‘needs a legislative framework to put it on a permanent footing, from which it can grow and expand’.

‘By empowering consumers to share their data with sectors we also hope to encourage the economic growth we’ve seen from open banking, across the economy’, the government states, adding that ‘this is crucial in markets where customer engagement is low or where businesses hold more information and data than the customer.’

Earlier this year the Labour Party said that it supported the work of the Joint Regulatory Oversight Committee (JROC) – which is overseeing the design of a new organisation to succeed the UK’s Open Banking Implementation Entity (OBIE), which was established in 2016 to get open banking off the ground (and which is now more commonly being referred to as Open Banking Ltd).

Reacting to plans for the DISD Bill today, Open Banking Ltd’s chief executive Henk Van Hulle said that open banking’s future “relies on a successful transition from the current competition remedy [a reference to the Competition and Markets Authority mechanism (‘order’) through which OBIE/OBL was set up and operates] to a long-term regulatory framework, which in turn relies on the proposed smart data powers” and that “prioritising this legislation will unlock further benefits for consumers and small businesses.”

RELATED ARTICLE UK Labour Party ‘embraces’ fintech in financial services ‘statement of intent’ – a news story (2 February) on Labour publishing six priorities as part of a ‘vision’ for the financial services sector

Consumer data: ‘disparate and underused’

Before then-prime minister Rishi Sunak called the general election, the Department for Business and Trade had published a ‘roadmap’ showing how it planned to encourage the implementation of ‘smart data’ schemes across seven sectors of the economy, including banking and finance.

The ‘The Smart Data Roadmap: action the government is taking in 2024 to 2025’ (published on 18 April) aimed to take advantage of the DPDI bill. In the run-up to the election Innovate Finance, the trade association for the UK fintech sector, had urged that reviving the bill ‘must be a top priority for the next government’.

Similarly, in a ‘Startup Manifesto 2024’ published in June, the Startup Coalition (a UK association that champions tech-based start-ups and scale-ups) stated that ‘the success of open banking, fuelling a £4bn [$5.12bn] UK fintech sector, both demonstrates what consumer innovation is possible with smart data – and how disparate and underused wider consumer data is across the economy.’

‘An economy enabled by smart data unlocks potential innovation across multiple levels – newcomers can put consumers in the driving seat of their data, competing on customer interface as well as core products,’ it said.

‘The UK was on the cusp of enabling smart data – but the DPDI bill that would have enabled it was a casualty of the election, never making it through Parliament’s wash-up. It is vital that the next government forge a path for smart data and ensure that startup success is not sacrificed on the altar of electoral chaos,’ the Startup Coalition’s document urged.

RELATED ARTICLE UK government publishes smart data ‘roadmap’ for seven sectors – a news story (19 April) on the above roadmap

Legislation ‘can power growth’

In a ‘FinTech Plan for Government’ published in the wake of Labour’s election victory, Innovate Finance named ‘building the world’s first Smart Data economy’ among three priorities that it said would have a ‘material impact on advancing the UK’s fintech ecosystem, and that require a clear strategic direction and roadmap from government.

Innovate Finance said in the publication that the smart data provisions of the DPDI Bill were ‘needed as soon as possible to give ministers powers to introduce open finance’ – open finance being open banking’s broader sibling concept.

Commenting today on the King’s Speech, Innovative Finance chief executive Janine Hirt said the association was “delighted to see the new government prioritising legislation that will enable the UK to build on our initial innovations in open banking, extend it to open finance and enable digital verification.”

“This can power growth – with the potential to create £215 billion [$280 billion] extra GDP over five years – and increase financial inclusion for all,” Hirt added.

The DISD Bill is located in the ‘Economic Stability and Growth’ section of the government’s legislative plans. A Pension Schemes Bill can be found in the same section. ‘National Security and Serving the Country’ section, meanwhile, contains a Cyber Security and Resilience Bill.