Smart Data Bill: The next big thing after Open Banking data

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Regulated data sharing is now mainstream. The Smart Data Bill, passed in 2025, extends Open Banking principles across the UK economy, giving consumers control over their information while establishing secure sharing protocols for key sectors.

Open Banking shows why this approach works. By January 2024, 1 in 7 digitally active consumers were using it, alongside one in five small businesses. In the same year, 130 million payments were made through Open Banking (almost double the number in 2022), with January 2024 alone hitting a record 14.5 million. That level of adoption proves how regulated, standardised data can move quickly from policy to practice and reshape markets.

Smart Data is designed to take that same foundation into industries where affordability, competition, and customer expectations are under pressure. For senior leaders, this isn’t one to park for the future. The framework is here. The focus now is on whether governance, infrastructure, and strategy are ready to compete in a cross-sector data economy.

In this article, we’ll cover:
↪ What the Smart Data Bill is aiming for
↪ What Open Banking tells us about Smart Data’s potential
↪ The opportunity for FS and beyond
↪ Challenges to address
↪ What businesses should do now

What the Smart Data Bill is aiming for

The Smart Data Bill takes the principles behind Open Banking and makes them part of the UK’s wider economy. It creates a single legal framework that lets ministers set up Smart Data programmes across different sectors, all under consistent rules.

The Bill is about giving people and businesses more control over their information and making sure markets can’t rely on outdated, one-sided data practices.

Here’s what it sets out to do:

  • Mandate secure data sharing: require providers to share customer and business data with authorised third parties, under strict technical and security standards.
  • Go beyond personal data: open access to contextual and usage data, not just the narrow portability rights under GDPR.
  • Create consistency across sectors: put all Smart Data schemes on a common footing to avoid fragmented standards and patchwork adoption.
  • Strengthen competition: make it easier for consumers and SMEs to switch, compare offers, and access products that reflect their real circumstances.
  • Address market failures: reduce barriers like inertia, lack of trust, or small firms being locked out by data gaps.
  • Support innovation and growth: enable new business models and attract investment into data-driven services.
  • Protect consumers: embed consent, security, and accuracy safeguards so that data sharing is trusted, not exploited.

And Smart Data won’t stop at financial services. Energy and telecoms are expected to follow quickly, with utilities close behind. The message for senior leaders? Start preparing now. The organisations that get governance, systems, and customer strategies in place early will be the ones setting the pace when schemes go live.

What Open Banking data tells us about Smart Data’s potential

Open Banking has already proven that regulated data sharing can work at scale. Adoption has accelerated, use cases have diversified, and new providers have entered the market with services that simply weren’t possible under closed data systems. For Smart Data, the lessons are less about whether it can succeed and more about what will determine how fast it scales and where the value will land.

Open Banking data: Fast facts 🔍

↪ 1 in 7 UK consumers and 1 in 5 SMEs now use Open Banking.
↪ 31 million Open Banking payments were made in March 2025, a 70% year-on-year increase.
↪ 130 million Open Banking payments were made across 2023, almost double 2022 volumes.
↪ £4bn+ estimated contribution of the Open Banking ecosystem to the UK economy.
↪ UK penetration (13%) is far ahead of major European markets (~2% in 2022).

The Open Banking experience shows:

Adoption follows trust and usability

Growth was strongest once consumers saw clear safeguards and user-friendly ways to give consent. Smart Data schemes will need equally strong frameworks for consent, security, and redress to avoid repeating early hesitancy.

SMEs are often the quickest to benefit

Smaller firms adopted Open Banking data services for cashflow forecasting, risk management, and access to fairer credit. The same could happen in other sectors, with Smart Data unlocking better tariff switching in energy or contract transparency in telecoms.

Payments and data services reinforce each other

Consumers use Open Banking both to make payments and to see their wider financial picture. That duality is key here: Smart Data schemes that combine transactional access with contextual data will create stronger propositions.

Innovation follows access

Variable recurring payments, new credit models, and affordability insights all came once data was opened up. Smart Data could drive similar innovation in utilities (real-time affordability support), telecoms (smarter retention tools), or insurance (dynamic pricing linked to real behaviour).

Scale creates competitive advantage

Once adoption hit critical mass in Open Banking, laggards struggled to catch up. The same will be true here: early movers in Smart Data will set customer expectations and gain a reputational edge that’s difficult to dislodge.

Global comparisons show the UK is ahead but not alone

UK Open Banking adoption outpaces Europe, yet Australia’s Consumer Data Right offers a glimpse of what full cross-sector Smart Data could look like. Senior leaders should note that Smart Data isn’t a UK-only experiment; it’s part of a wider international trend that investors and regulators are watching closely.

Keen to learn more? Read: How Open Banking is redefining the credit journey from start to finish

These lessons show that Smart Data has the potential to go further and faster than Open Banking, provided firms are ready to build trust, design compelling use cases, and move early before competitors set the standard.

Spotlight: What the Smart Data Bill unlocks for financial services

For financial institutions, Smart Data is the natural next step after Open Banking. It creates the conditions for Open Finance, where mortgages, loans, pensions, insurance, and investments can all be brought into scope under the same regulated framework.

For banks, lenders, and insurers, the payoff looks like this:

✅Sharper affordability and vulnerability checks: real-time data strengthens Consumer Duty compliance and reduces reliance on outdated credit files.

✅Deeper financial inclusion: bringing fairer credit access to gig-economy workers and thin-file customers.

✅Richer risk insights: visibility of assets, liabilities, and spending behaviours across multiple accounts and products.

✅Operational efficiency: fewer manual reviews, faster onboarding, and better straight-through decisioning.

✅Reputation and trust: firms that use Smart Data responsibly will meet regulator expectations and build stronger customer confidence.

For financial institutions, Smart Data brings stronger compliance and better decisions. The bigger story, though, is that the same approach is about to reshape markets well beyond banking.

The wider opportunity: Applying Smart Data across sectors

Smart Data isn’t confined to finance. Some of the biggest gains will come in sectors where affordability, vulnerability, and competition pressures are most visible.

➡Energy: Smart Data could make tariff switching near-instant, give suppliers the ability to tailor repayment plans to live usage and income, and strengthen the way vulnerable households are identified and supported.

➡Telecoms: Providers would have a clearer view of customer affordability, helping to cut bad debt and improve retention. Greater transparency on contracts and pricing would also make switching easier for customers.

➡Utilities: Access to live financial and usage data could give providers stronger evidence of fair treatment, allow earlier intervention when households fall behind, and support Consumer Duty requirements around vulnerability.

➡Public services: Local authorities could use Smart Data to back up decisions on financial support or poverty relief with live evidence, rather than lagging indicators or incomplete records.

These are markets where inertia and data gaps have kept customers locked in. Smart Data has the potential to break that pattern, creating more open competition and forcing providers to compete on service.

Barriers firms need to overcome with Smart Data

Smart Data has the potential to reshape markets, but getting there won’t be straightforward. Open Banking showed what’s possible, but it also exposed the hurdles that need to be overcome if adoption is going to scale smoothly.

The main challenges include:

🚧Trust and consent: Customers will only share data if they believe it’s secure and if they understand how it will be used. Clear, consistent consent journeys and visible safeguards will be critical.

🚧Standards and interoperability: Open Banking succeeded because of common API standards. Extending that consistency across sectors with very different data sets, from meter readings to telecoms billing, will be much harder.

🚧Liability and redress: When something goes wrong, who carries the responsibility: the data holder, the data recipient, or the intermediary? The Bill gives the framework, but firms will need governance that sets out accountability in practice.

🚧Data quality and completeness: Financial data already comes with gaps and inconsistencies. Utility and telecoms data will be no different. Without investment in data quality, Smart Data risks delivering patchy insights and undermining confidence.

🚧Legacy systems and integration: Many organisations still run on infrastructure that wasn’t designed for real-time data exchange. Without significant upgrades, plugging Smart Data into day-to-day processes will be slow and expensive.

🚧Regulatory overlap: Smart Data doesn’t sit in isolation. It overlaps with Consumer Duty, data protection law, and sector regulators. Aligning these frameworks will take work, and missteps will carry both compliance and reputational risks.

These hurdles may look significant, but they can be managed. Let’s look at how early adopters are doing this…

What businesses should do now

Drawing on what we’ve seen first-hand with Open Banking data, here’s a practical roadmap for firms to get ready now:

Step 1. Build trust into consent journeys

Customer adoption depends on confidence. Open Banking data has already shown that customers will share information if they can see the value and trust the safeguards. Review how consent is captured, evidenced, and explained. Make sure customers can see, and believe, that their data will be used safely and transparently.

Step 2. Push for common standards

Fragmentation kills adoption. The API framework used in Open Banking data is the blueprint. Engage with industry bodies and regulators to help shape similar standards for Smart Data, or risk ending up with rules that don’t fit your business.

Step 3. Clarify liability and governance

Open Banking data has made clear that liability can be a sticking point. Don’t wait for Smart Data regulators to dictate every detail. Define internal accountability now: who owns data use, who handles disputes, how incidents are escalated.

Step 4. Fix data quality at the source

Incomplete or inconsistent records undermine confidence. Open Banking data has already filled gaps in affordability and vulnerability assessments by providing live, accurate insights. Apply the same discipline to Smart Data: audit inputs, cleansing processes, and validation routines.

Step 5. Plan for integration

Open Banking data proved the value of real-time feeds, but legacy systems often struggled to keep up. Map where upgrades are needed, test API readiness, and prioritise investment where Smart Data could create the most friction.

Step 6. Align with wider regulation

Consumer Duty, data protection, and sector regulators all overlap with Smart Data. Use Open Banking data programmes as a guide: map the touchpoints, and make sure compliance teams are joined up, not working in silos.

Firms that tackle these issues early will turn potential stumbling blocks into points of strength. And when Smart Data schemes move from policy to practice, they’ll be ready to compete on service, not just compliance.

From Open Banking to Smart Data

The Smart Data Bill marks another major development in how markets operate. What started with Open Banking is now set to expand across finance, energy, telecoms, and beyond. Regulated, standardised data sharing will become the norm.

Open Banking showed what makes adoption work: trust, simple consent journeys, and clear standards. Smart Data will need the same ingredients — and the scrutiny will be even tougher given the scale of data in play.

The firms that move early will come out ahead. Strengthening governance, fixing data quality, and building products around live information are what will turn Smart Data from compliance into opportunity.

At AperiData, we’re already helping firms use Open Banking data to make faster, fairer decisions and laying the groundwork for what comes next. Get in touch to see how.

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