On 19 June 2025 the UK enacted Data (Use and Access) Act 2025 (the DUAA). The DUAA is a wide-ranging and significant reform package with implications for all businesses operating in the UK. In a previous blog, we explained the background to the DUAA and its key provisions.
In this blog, we take a closer look at Part 1 of the DUAA, which establishes ‘smart data schemes’. Those provisions are intended to put the UK’s existing Open Banking regime on a statutory footing and expand personal data portability and sharing schemes to other sectors.
Smart data schemes: an overview
The UK’s pioneering Open Banking regime, which enables UK customers to move and manage money between financial institutions, has widely been seen as a technological and economic success. As of May 2025, one in five consumers and businesses are now using Open Banking, up from just one in 17 in March 2021.
‘Smart data’ aims to continue to build on the economic benefits of Open Banking through third-party innovation around new data flows, at the same time as addressing broader policy concerns related to data portability as a competition concern and barrier to user access and choice.
Under the DUAA, the Secretary of State or the Treasury will have the power to make regulations relating to the secure sharing of customer data, upon the customer’s request, with authorised third-party providers (ATP). The sectoral specific regulations will then set out the scope in each scheme – this can include: (1) parties who are required to provide data; (2) the kinds of data which should be provided; (3) how and when to provide such data; (4) how the data is secured and protected; and (5) the payment of fees and financial assistance.
Unlocking cross-sector opportunities
The majority of the DUAA’s provisions, particularly those enabling the new smart data schemes, will be brought into full effect through subsequent secondary legislation. This means that the detailed operational rules, specific timelines, and precise obligations are yet to be published. The heavy reliance on secondary legislation means that the DUAA, in its current form, is largely an enabling framework rather than a complete set of immediately actionable rules.
The current Labour government's list of use cases may expand on those set out in the previous government's Smart Data Roadmap (which identified banking, finance, energy, road fuels, telecoms and transport as ‘priority sectors’ and retail and home buying as ‘sectors of interest’).
Examples of potential smart data schemes include:
- Pension Dashboards – the government has indicated that they support the principle of enabling multiple pension dashboards services.
- Telecommunications – As outlined in the last government’s roadmap, Open Communications may be used to allow for data portability between mobile networks or broadband providers.
- Finance – Open Finance may open the doors for utilising data sharing to increase accessibility across a wide range of products, such as retirement, savings, investments and cash flow management.
Why does this matter for businesses?
Businesses should be on the lookout for emerging schemes that may apply to them. This is because smart data schemes: (1) carry compliance burdens and risks for businesses required to share data; and (2) present commercial opportunities for businesses looking to exploit such data.
Costs of compliance and risks
The impact of smart data schemes will depend on sector-specific regulations.
It will be important for businesses to consider engaging proactively with scoping and standard-setting processes to manage potential business impacts. This is especially so given the broad regulation-making powers conferred on the Secretary of State or the Treasury, which extends to topics such as fees and financial assistance.
In addition, businesses should take steps once schemes are established to manage risks associated with participation in such schemes. While the DUAA empowers the Secretary of State and Treasury to make secondary legislation exempting public bodies from liability in connection with Smart Data schemes, they are not empowered to confer equivalent protections on businesses. It seems likely that industry schemes will also need to provide for complaints and redress mechanisms that businesses will need to navigate.
Commercial opportunities
Smart data schemes are intended to create economic opportunities for businesses seeking to leverage such data for the benefit of consumers. Accordingly, smart data schemes are likely to present opportunities for new market entrants focused on leveraging consumer data, such as mobile app developers and consumer choice service providers.
While smart data schemes undoubtedly have a cost, businesses that will be required to share data may also wish to look for opportunities to benefit from such schemes. By taking a proactive approach, businesses can seek to position themselves to utilise smart data schemes to improve their own services and exploit potential first mover advantages. Early engagement with regulators and entry into smart data schemes may also allow for businesses to exert greater influence over the development of schemes, including technical specifications.
Impact on financial services
The DUAA includes specific provisions which empower the government to require the Financial Conduct Authority (FCA) to make rules which will facilitate the use of open finance. Such rules may require specified financial services providers or other prescribed persons to use a “prescribed interface”, comply with prescribed interface standards or participate in prescribed interface arrangements when providing or receiving customer or business data. The Government may also regulate for the FCA to have powers to respond to failures to comply with such rules, and may require or enable the FCA to have powers to set or increase penalties in relation to compliance failures. Open finance is intended to enable the extension of the benefits of Open Banking to a wider range of products (including mortgages, pensions, investments and savings according to the Department for Science, Innovation and Technology), so this extension could affect a wide range of financial services businesses.
The powers under the DUAA are also expected to be used to put the existing Open Banking regime onto a longer-term footing (including by transferring related rule making powers from the Competition and Markets Authority to the FCA).
Conclusion
The UK government has firmly positioned smart data at the centre of its data reform package. It promises economic opportunity and improved consumer choice. However, with nearly all details left to regulation, time will tell whether the reality meets the hype.
Businesses in potentially affected sectors may wish to:
- Consider getting involved in policy discussions: we anticipate that there will be significant debate around where and how smart data schemes should be rolled out.
- Monitor policy developments related to the expansion of data schemes to new sectors. Early indications are that the government is thinking creatively and expansively about potential use cases.
- Proactively assess risks and opportunities: as noted above, while compliance costs can be significant, the commercial upsides are transformative for forward-thinking businesses.
For more information about the DUAA, read our ongoing series unpacking it.