We will support the development of an open platform for SME finance. By bringing together a global identity standard and a safe, secure and permissioned method of sharing information; this open platform could harness novel data sources and advanced analytics to provide SMEs with more choice and better access to productive finance.
To help create an open platform to boost access to finance for small businesses and choice for households, we will:
- Help small businesses harness the power of their data by developing the concept of a portable credit file, to give greater access to more diverse and competitive financing options, including for global trade.
- Respond to the Government’s Smart Data Review with recommendations for how data standards and technology can promote an open platform for finance and deliver greater choice and keener pricing for businesses and individuals.
- Champion the Legal Entity Identifier (LEI) as a globally recognised and unique identifier for all businesses in the UK, including integrating the LEI in the Bank’s new RTGS service and mandating its use in payment messages.
Our responseFind out how an open data platform could deliver a portable credit file for SMEs:
- Explainer: How an open data platform could deliver a portable credit file for SMEs (pdf)
- KnowledgeBank: Find out how much small businesses contribute to UK GDP
- Supporting information regarding an open platform for SME finance (pdf)
Follow-up actions
In March 2020, the Bank published a paper on Open data for SME finance.
The Open data for SME finance paper explains the proposal in more detail, and provides an update on what we have learnt from our research and industry engagement to date. It will guide the Bank’s ongoing engagement with public authorities, including as an input to the Government’s Smart Data Review and Digital Markets Taskforce, as well as the FCA’s Open Finance initiative. In particular, this paper will form part of the Bank’s input to the Government summit announced in the March 2020 Budget, looking at what further data needs to be made accessible to make it faster and easier for SMEs to shop around for credit.
As part of the Bank’s efforts to champion the LEI as a globally recognised and unique identifier for all business in the UK and mandating its use in payment messages, Executive Director for Banking, Payments and Innovation, Victoria Cleland has co-authored an article on ‘The value of the LEI for the payments industry’.
This article describes the international progress made so far in the uptake of the LEI and sets out the potential benefits that LEIs offer as a global means of verifying identity in payments. It describes existing plans to incorporate LEIs into payments, and the barriers to this adoption. It concludes by laying out a ‘call to action’ to all market participants (national international, public and private) explaining the steps required to realise the full potential LEIs can bring to the payments industry and the wider economy.
(Cleland, V. and Hartsink, G. (2019), ‘The value of the LEI for the payments industry’, Journal of Payment Strategy & Systems, Vol. 13, No.4, pp. 322-336.)
In August 2019, the Bank of England responded to two Consultations run by the Department for Business, Energy & Industrial Strategy (BEIS) on Smart Data and on the role of Companies House. Our responses encourage Government to pursue a standardised approach to data sharing across a wide range of markets, connecting private and public data, and to maximise the potential for the Legal Entity Identifiers (LEI) to deliver tangible benefits for the real economy.
These responses represent part of the Bank’s efforts to champion a platform to boost access to finance for SMEs and to champion the LEI as a globally recognised and unique identifier for all businesses in the UK.