A committee of regulators will develop a new open banking entity
A committee of regulators will develop and oversee a new open banking entity to drive forward progress, following lobbying from fintechs.
The Competition and Markets Authority (CMA) said that open banking regulation is set to be overseen by a new Joint Regulatory Oversight Committee led jointly by the Financial Conduct Authority (FCA) and the Payments Service Regulator (PSR).
Read more: FCA recognises success of open banking
The competition watchdog said the committee will draw up proposals for the design of the future entity by the end of the year, to take over from the Open Banking Implementation Entity (OBIE).
It said the new entity will be responsible for building on the progress made so far and further developing the data-sharing initiative after the implementation phase of the CMA order ends.
Nearly all objectives for the roadmap for the implementation of open banking have been completed and what remains involves maintaining the standards, making them more widely available and monitoring compliance.
The CMA will be responsible for overseeing these requirements and recommended that the future entity should have independent and accountable leadership, with a majority of independent directors on its board.
The watchdog said it should have a clear purpose set out by the board, be adequately resourced to carry out its functions and be able to adapt to the future needs of the sector.
It should also have a system to effectively support the monitoring and enforcement of open banking implementation, the CMA added.
This follows a coalition of fintechs, including former peer-to-peer lending giant Zopa and new P2P platform Plend, calling for the CMA to accelerate its decisions on open banking earlier this month.
Read more: OBIE welcomes extension to FCA open banking change
“Open banking has been a major success in the UK, bringing innovative new services to retail banking and benefiting consumers, businesses and the UK economy,” said Andrea Coscelli, chief executive of the CMA.
“The CMA has carefully considered the appropriate future arrangements to boost open banking so that its significant benefits can be realised even more widely. We have today outlined the core principles that will ensure the new entity successfully picks up the reins.”
Read more: Open banking given a boost by competition watchdog clarification
“The government and regulators are committed to maintaining the UK’s leadership in the field and sustaining this momentum,” a joint statement from the CMA, the FCA and the PSR said.
“We want to build on the initial success of UK open banking to help unlock and realise further benefits for consumers, businesses and the wider economy.”
Read more: Open banking reaches five million users
Charlotte Crosswell, trustee and chair of the OBIE, welcomed the announcement.
“There has been significant collaboration in developing the infrastructure, standards and ecosystem that we have in place today,” she said.
“We now need to drive forward competition and adoption to realise the benefits of innovation for consumers and businesses across the UK.
“Today’s announcement underlines government and regulators’ commitment to the future success of open banking, and the foundations for open finance and beyond. We will look forward to working with the new Joint Regulatory Oversight Committee over the course of this year.”