OBL and SDG scored on Open Banking future entity proposals in new FCA assessment report

An independent assessment report into a future Open Banking standards-setting body, prepared by KPMG, has been published by the Financial Conduct Authority (FCA).

KPMG facilitated the establishment of an Industry Evaluation Panel (IEP) of industry participants whose role was to provide an “expert, evidence‑based assessment” of the proposals put forward by Open Banking Limited (OBL) and the Smart Data Group (SDG), as the industry considers the next steps for a Future Entity.

The report stated: “Across the IEP, the OBL proposal received higher scores than the SDG proposal in each category, with a high degree of consistency across panel members.”

Out of a total potential score of 76, the OBL proposal received a total weighted score of 63.88, and the SDG proposal received a total weighted score of 46.

The categories they were scored across included governance, independence and ethical framework; industry support and stakeholder engagement; technical capability; funding and financial feasibility; risk management and security; and operational feasibility.

The IEP scored the OBL proposal higher in the governance category, “citing its practical readiness, proposed governance structures, and credible mobilisation plan”.

While SDG was acknowledged for “its independence, strong design intent, and emphasis on broad participation”, it ultimately received a lower score because there “was less clarity on how governance mechanisms would operate in practice”.

The FCA confirmed it will publish an additional report prepared by KPMG in the coming weeks, which sets out considerations relevant to how the Future Entity could be operationalised.

Reactions from OBL and SDG

Henk Van Hulle, chief executive officer of OBL, said: “This provides a clear conclusion that OBL is the most suitable organisation to facilitate the industry-led design of the future entity, with OBL scoring highest in every category.

“We are encouraged by the strong level of support our proposal received across the ecosystem throughout this process and we look forward to continued engagement with industry.”

He added: “This is a defining moment for the sector; one that provides a pathway to realising significant benefit for consumers, businesses and the UK economy. Recent independent economic analysis commissioned by OBL found that Open Banking has already delivered £8.3 billion of value to the UK economy. Today marks the next step in unlocking the potential £43 billion of annual value when at full maturity and adoption.”

Paul Scully, chair of the advisory board at SDG and former minister for Smart Data, said the group will continue to be “an active contributor to the design phase, and we look forward to working with industry and regulators to get this right”.

Dr Ruth Wandhöfer, mobilisation lead at SDG, added: “We are pleased that the report recognised SDG’s strengths across all categories and reflected support from industry participants for our independent and future-focused model. We remain fully committed to supporting the design phase and to an outcome that is open, effective, and serves the whole ecosystem.”

Read the report in full here

Further reading: Financial Conduct Authority unveils UK’s Open Finance Roadmap to 2030