OBIE welcomes extension to FCA open banking change
The Open Banking Implementation Entity (OBIE) has welcomed the City watchdog’s announcement of extending the deadline for implementing the open banking 90-day authentication rule change.
Last year, the Financial Conduct Authority (FCA) announced upcoming rules to alter the controversial 90-day reauthorisation rule for open banking. The regulator revealed that it was shifting the requirement to reauthenticate consent every 90 days to the third-party provider which is accessing the service, a change welcomed by industry.
It means a user of a fintech app will not be sent back to their bank every 90 days to reauthenticate and give permission for their data to be accessed but instead this will be done by the open banking provider.
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The regulatory change comes into force on 26 March, but this week the FCA has said that account servicing payment service providers should apply the exemption as soon as possible after 26 March 2022 with a view to the widespread adoption of the exemption by 30 September 2022.
The regulator said that third-party providers should be technically ready to reconfirm customer consent as soon as possible after 26 March 2022.
However, they may choose not to reconfirm consent until 30 September this year provided that authentication of customer consent is applied at least every 90 days during that period.
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“This is to limit the risk of consumer disruption and to ensure that either Strong Customer Authentication has been applied or re-consent obtained in any 90-day period,” the FCA said.
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“The OBIE is supportive of these changes which we believe will minimise disruption to consumers and small- and medium-sized enterprises as the industry prepares to implement these changes,” the OBIE said in a blog on its website.
Several peer-to-peer lending platforms use open banking such as ArchOver, JustUs, Rebuildingsociety and ArchOver, while more are implementing it or looking at doing so.