Zopa and Plend call for CMA to hurry its open banking decisions
Former peer-to-peer lending giant Zopa and new P2P platform Plend are among the fintechs calling for the Competition and Markets Authority (CMA) to accelerate its decisions on open banking.
They were part of the coalition of 26 UK fintechs, led by advocacy group Coadec and fintech trade body Innovate Finance, that signed an open letter to CMA chief executive Dr Andrea Coscelli CBE that expressed concerns at the delays to critical decisions on the future of the data-sharing initiative.
One of the fintech’s key concerns centred around the delay to the CMA’s decision on the introduction of variable recurring payments (VRP) for sweeping.
VRPs allow customers to connect authorised payments providers to their bank account so that they can make payments on the customer’s behalf, while ‘sweeping’ is the automatic transfer of money between a customer’s own accounts.
The fintechs warned that third party providers could not currently onboard potential clients or support current clients who want to benefit from VRP, and said that the industry as a whole is at an increased risk of being unable to deliver VRP in July.
They also wrote to express concern about the delay in publication of the CMA’s direction on the future of the Open Banking Implementation Entity (OBIE) – a body set up to roll out the data-sharing initiative.
The fintechs noted that it has been 10 months since the final roadmap of the OBIE was published in May.
Zopa, which exited the P2P space in January and has been using open banking since May 2021, was one of the signatories, alongside Plend, a soon-to-launch P2P consumer lender that will use the data sharing initiative to help with its credit decisions.
Other signatories include open banking firms TrueLayer, Salt Edge, Moneyhub, Plaid and Tink.
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“A lack of clear direction on these issues means that uncertainty will prevail and that our world-leading open banking ecosystem in the UK risks falling behind as other international markets progress towards open finance,” the letter said.
“We call for progress on these two issues to be urgently expedited, to give the 300 plus service providers and over five million users certainty on the future direction of the open banking regime in the UK.”
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“The UK has a great story to tell on open banking,” said Adam Jackson, director of policy at Innovate Finance.
“It is unlocking new business models and services, and improving outcomes for consumers using financial services. However, it is not ‘mission complete’.
“As we explain in the letter, the CMA needs to keep pushing along the open banking roadmap to help innovative fintech companies create more beneficial products and services for consumers.
“We look forward to working with the CMA and other government bodies to keep the UK ahead of international competition in open banking innovation.”