Plaid has recommended that the UK Financial Conduct Authority (FCA) not create a standardised API for open finance. It suggests instead to let private sector aggregators create and sell use of their own API’s.
The rationale that Plaid gives is that aggregators have experience in building and maintaining APIs. Plaid suggests that competition between aggregators will result in competition on API quality.
Plaid responded to a Call for Input on Open Finance that the FCA put out in December 2019. Consumers and firms have until 1st October 2020 to respond to this Call for Input. Open Finance would make customers’ data more portable (at the customer’s request) in sectors including savings, insurance, mortgages, investments, pensions and consumer credit. Open Finance would be an extension of Open Banking.
In Plaid’s response, Plaid also suggested regulating the retrieval of data rather than the display of data. In this way, firms such as Plaid that retrieve data would be regulated, but firms that then use or display that consumer data might not be regulated. Plaid suggests that this might increase competition amongst firms that display data.
Plaid expects the path to Open Finance in the UK to take some time as there is still a lot of work to do. Plaid expects it to take “months if not years”.