Smart Data has arrived. For many people outside specialist policy circles, this may be the first encounter with the term, but its origins stretch back almost a decade. Smart Data is the long-awaited evolution of the data portability right first enshrined in the EU’s General Data Protection Regulation (GDPR) in 2016, back when the UK was still a member of the EU. That right established, in principle, that individuals and businesses should be able to move their data between service providers. In practice, however, exercising that right proved far harder than anticipated.
The idea behind data portability was genuinely radical. Organisations that had long treated customer data as proprietary assets were now legally obliged to make that data available to the people it was about. Many expected rapid transformation. Instead, progress was slow. The reason was simple. A legal right, unsupported by practical data infrastructure, does not automatically translate into meaningful outcomes.
Early initiatives exposed this gap. The Midata programme, a voluntary scheme that allowed customers to download historical service data as CSV files, aimed to help people make better choices and switch providers more easily. While well-intentioned, it failed to gain traction. Most people do not want to download spreadsheets, interpret them, and upload them elsewhere. Unsurprisingly, usage remained low and the Competition and Markets Authority later concluded that Midata was not fully effective.
A more successful model arrived via a different regulatory route. The revised Payment Services Directive, PSD2, enabled Open Banking, which shifted the focus from raw portability to interoperability. Instead of files, data moved through secure, standardised APIs within a trusted ecosystem. With explicit consent, individuals and SMEs could share their data with regulated third parties. Open Banking catalysed an explosion of fintech innovation and supported the rise of challenger banks, reshaping the UK financial services landscape.
Smart Data is the attempt to replicate that success beyond banking. Enshrined in the Data (Use and Access) Act, it enables the secure sharing of customer data with authorised third parties across sectors such as energy, transport, property, retail and finance. At present, however, Smart Data remains closer to a legal framework than a functioning ecosystem. The supporting infrastructure, standards, APIs, trust frameworks and registries largely do not yet exist.
Building that infrastructure will require investment, and in the short term, much of the cost will fall on large data holders. As Open Banking demonstrated, this often creates friction, particularly when the return on investment for consumers is not yet clear. This is precisely why proving value early matters.
The Smart Data Challenge Prize was designed to do exactly that. Delivered by a consortium including the ODI, Nesta ChallengeWorks, bigspark and NayaOne, the prize created a safe environment for innovators to develop and test Smart Data-enabled services using high-quality synthetic data. Participants also received expert advice and mentorship on everything from data ethics to sector-specific technical and commercial knowledge. The result was a compelling set of use cases, ranging from greener energy choices and more efficient transport, to better support for vulnerable households and a radically improved home-buying process.
The winning entry, a Digital Property Pack developed by Moverly and the Open Property Data Association, demonstrated how Smart Data could reduce delays and uncertainty in the UK property market. The runners up showcased an AI-driven life administration tool and a personalised transport dashboard combining cost, carbon and financial data.
The question is no longer whether Smart Data can deliver value, but how quickly and for whom. With renewed momentum, a re-established Smart Data Council and growing sector-led initiatives in finance, energy, transport and property, the conditions are now in place. Our recommendations for the Department for Business and Trade (DBT) to take forward Smart Data are:
- Move from framework to mandate. DBT should begin mandating Smart Data schemes in sectors where use cases, datasets and market actors are already well understood, notably finance, energy and property. Waiting for perfect clarity risks delaying benefits that are already within reach.
- Use pilots to unlock harder sectors. Where ecosystems are less mature, such as transport, water and telecoms, DBT should deploy targeted funding for pilots to surface priority datasets, test governance models and build confidence before regulation.
- Make open data a default. Every Smart Data mandate should include a clear open data component for non-sensitive business data. DBT should mandate the use of established open licences such as CC-BY or the Open Government Licence, rather than inventing bespoke alternatives.
- Set sights on digital markets early. Sector-by-sector rollout should be the warm-up, not the endgame. Data-rich digital platforms dominate modern commerce and communication, and only regulation-backed interoperability will shift competition from lock-in to service quality and price. Government should engage constructively with Big Tech, but remain firm in prioritising consumer outcomes.
- Act as an orchestrator, not the architect. DBT’s strength lies in coordination. It should align regulators, industry, civil society and innovators around shared outcomes, ensure schemes are compatible across sectors, and keep governance and technical approaches open. Detailed standards and implementations are best defined by those closest to the data and the use cases.
The next step is clear: move from concepts and prizes to real-world mandates, pilots and interoperable data ecosystems that deliver tangible benefits for people and businesses alike.
