Smart Data: The Industry May Finally Be Solving the Wrong Problem

Ask ten people what Smart Data means and you’ll probably receive ten different answers.

Some will point to Open Banking and Open Finance. Others will reference Digital Property Identity, reusable credentials or data portability. Technology providers will talk about APIs, standards and interoperability, whilst policymakers will focus on consumer control and consent.

At first glance, these appear to be separate initiatives addressing different challenges.

They are not.

In reality, they are all attempting to solve the same underlying problem: how to create trusted information that can be reused rather than repeatedly recreated.

Duplication by Default

For decades, the mortgage and property sectors have accepted duplication as an unavoidable part of the customer journey. Consumers prove who they are multiple times. The same information is collected by brokers, lenders, conveyancers and estate agents. Documents are requested, reviewed and validated repeatedly. Data is transferred between organisations through a combination of portals, emails, PDFs and manual processes.

The industry has become remarkably good at collecting information. It has become far less effective at reusing it.

That may finally be starting to change.

The Future Mortgage Journey

Recent activity from the FCA provides an interesting indication of where the market could be heading. Through its Smart Data and Open Finance initiatives, alongside a series of mortgage-focused Tech Sprints and industry engagement programmes, the regulator is helping explore what a future mortgage journey might look like when trusted information can move more freely and securely between organisations.

The significance of this should not be underestimated. Historically, innovation in financial services has often been driven by technology providers, lenders or market forces, with regulation following behind. What makes the current Smart Data conversation different is that policymakers, regulators and industry participants are increasingly aligned around a common objective.

The goal is not simply to digitise existing processes. The goal is to reduce the need for consumers and businesses to repeatedly prove the same facts.

When viewed through that lens, many of the initiatives currently taking place across the mortgage and property ecosystem begin to look remarkably similar.

The work being undertaken by CFIT around Smart Data in property, the emergence of Digital Property Identity, the growing focus on reusable digital credentials, the evolution of Open Finance and even discussions around digital identity and verified information sharing are all attempting to answer a version of the same question: how can trusted information be created once and reused many times?

Verified, Trusted, Re-Usable Data

For lenders, this presents a significant opportunity.

Much of the friction within the mortgage journey exists not because information is unavailable, but because it cannot be trusted, shared or consumed efficiently across organisational boundaries. Income, identity, property information and source of funds are routinely verified throughout the transaction, often by multiple parties using different processes and systems. The result is unnecessary duplication, increased operational cost and a customer experience that frequently falls short of expectations.

Imagine a future where a customer can securely share verified information with permission, where trusted data arrives with the evidence and provenance required to support decision making, and where participants across the transaction can rely on the same source of truth rather than creating their own version of it. This is ultimately what Smart Data is seeking to enable.

Of course, trusted information alone is not enough. Creating a verified digital asset is one challenge. Ensuring it can move effectively between participants is another.

Components, Not Blueprints

This is where the industry’s focus on interoperability becomes increasingly important. A digital property identity has little value if it cannot be consumed by lenders, conveyancers and estate agents. Reusable credentials have limited impact if they remain confined to a single platform or provider. Smart Data only delivers meaningful outcomes when information can flow securely across organisational and technology boundaries.

This is why so many of the conversations currently taking place across the industry are beginning to converge. Data standards, digital identity, Open Finance, Smart Data, Digital Property Identity and interoperability can often appear to be separate workstreams competing for attention and investment. In reality, they are different components of the same future ecosystem, one where trusted information can be reused, shared securely and applied at the point of need.

For lenders, the immediate challenge is not implementation. The market remains in the early stages of development and many of these initiatives will take time to mature. The challenge is understanding the direction of travel.

Whilst individual solutions, standards and frameworks will inevitably evolve, the destination is becoming increasingly clear. The future mortgage journey will depend less on collecting information and more on accessing trusted information that already exists.

The organisations that recognise this shift early will be better positioned to shape the next generation of customer experiences, operating models and partnerships. Those that do not risk continuing to invest in solving problems that Smart Data, interoperability and reusable credentials are specifically designed to remove.

The industry has spent years trying to make the movement of information more efficient. The more interesting question now is whether information needs to move at all, or whether trusted, reusable digital assets can fundamentally change the way decisions are made throughout the mortgage journey. That is the challenge the FCA, CFIT and a growing number of industry participants are now exploring, and it is a conversation lenders should be paying close attention to.