Thomas Hill, principal consultant at Capco, comments on the Government’s Data (Use and Access) Bill (which reached the Committee stage in the House of Lords yesterday), and its implications for UK financial services firms.
He said: “The Data (Use and Access) Bill – which yesterday reached the Committee stage in House of Lords – marks a major shift in the UK’s approach to digital governance, AI oversight and transparency, digital verification, and how computer-based evidence is treated. The reforms proposed in the Bill are expected to bolster consumer trust, improve compliance standards, and support technological innovation – with direct implications for the UK financial services sector.
Substantial opportunity for UK financial services
“While it will involve additional implementation, governance and compliance costs, the Bill also presents substantial opportunities for financial services firms with the bills focus on ensuring AI is deployed responsibly, data security is prioritised, and digital processes are inclusive and transparent, likely to see firms gain greater trust from consumers. Additionally, the Bill promises operational gains, likely to drive streamlining of customer onboarding, reducing time spent on manual verifications, and enhancing customer data quality.
“At an industry level, this Bill will be crucial in positioning the UK at the forefront of secure and innovative financial services, paving the way for responsible technological advancement while creating a regulatory environment that prioritises safety and protects individual rights.
Firms must act now to position themselves well for compliance
“That said, compliance will be no small feat, and firms must act now to ensure they are on the front foot when the bill reaches royal assent. In particular, firms may be required to make significant investments into IT infrastructure to meet the new compliance requirements. This might include implementing Algorithmic Impact Assessments, establishing transparency records, and upgrading systems to comply with the enhanced verification standards. For some firms, this could require an update or even overhaul their IT infrastructure. With this cost likely to be substantial, businesses should prepare for the initial outlay while recognizing the long-term potential of improved data governance in reducing regulatory fines and enhancing operational resilience.
“Alongside this, ensuring ongoing compliance with the new requirements for AI accountability and data verification will likely involve additional training, hiring, and the use of specialized compliance software. Business leaders must consider these staffing and operational costs as part of their compliance budget now. Meanwhile, the changes regarding computer-based evidence will require maintenance of a high standard of data integrity. This means routine audits and validation processes, which entail costs but also serve as risk mitigation against potential legal challenges. Ensuring IT systems are robust and reliable will help reduce exposure to litigation and reputational damage, safeguarding the institution’s standing.
“By acting now, and embracing the Bill’s requirements, firms will be well positioned not only for compliance but also to leverage enhanced customer trust and operational efficiency in a rapidly evolving digital economy.”
