The Competition and Markets Authority (CMA) has today published its recommendations for the future regulatory oversight, leadership, resourcing, governance and monitoring of Open Banking in the UK. These recommendations will help shape a future entity that will succeed the Open Banking Implementation Entity (OBIE), which was responsible for the delivering of the initial roadmap.
The CMA, HM Treasury, the Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR) have today also published a joint statement outlining their plans for oversight of the future entity, building on the CMA’s recommendations, including the establishment of a Joint Regulatory Oversight Committee (JROC).
Charlotte Crosswell, the OBIE’s trustee and chair, welcomed the announcement, saying: “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.
“There has been significant collaboration in developing the infrastructure, standards and ecosystem that we have in place today. We now need to drive forward competition and adoption and realise the benefits of innovation for consumers and businesses across the UK.”
The industry has broadly welcomed the announcement and further clarity, yet concluded that questions still remain around the future of Open Banking in the UK.
Maria Palmieri, head of public policy at Yapily, said: “With the current mesh of regulators, it is almost impossible for fintechs, banks and Open Banking providers to plan for the future.
“This technology holds the power to transform the financial livelihoods of people and businesses. But to make that happen, we need to see the creation of a formal Open Finance Framework and further guidance on the future role of the Open Banking Implementation Entity, particularly on monitoring and enforcement.”
Jan van Vonno, research director at Tink, noted that the company was pleased with the CMA’s consultation response and the joint statement. However, he suggested that much more could be done to unlock the value of Open Banking, especially in payments.
“The announcement of the JROC will help ensure a smooth transition towards a Day 2 scenario where the ‘Future Entity’ can leverage the existing infrastructure to expand the current capabilities into the realm of open finance,” – Vonno said.
The CMA launched a public consultation on the future oversight of Open Banking in March 2021. The consultation sought views on what arrangements should be put in place to ensure effective oversight and governance upon the delivery of the initial roadmap under the CMA’s Order for Open Banking, and how the CMA should manage the transition process towards this new governance model.
Andrea Coscelli, chief executive of the CMA, said: “The CMA has carefully considered the appropriate future arrangements to boost Open Banking so that its significant benefits can be realised even more widely.”
Henk Van Hulle, the OBIE’s CEO, said: “We have already made positive organisational, governance and operational changes to ensure we are best placed to take these arrangements forward.
“We will consult with key stakeholders and develop a detailed plan for transition, and I am confident that we are in a strong position to deliver what is needed to drive progress and maintain momentum in open banking.”
According to the joint statement, the JROC will convene the first meeting in the second quarter of 2022 and will draw up proposals for the design of the future entity by the end of the year.