Open Banking SWG: Role for OBIE’s successor as ‘central standard-setting body’

Ellie Duncan
15 Feb 2023

The final report from the Strategic Working Group (SWG) on the future of Open Banking in the UK has revealed that while stakeholders have “differing visions” about a successor to the Open Banking Implementation Entity (OBIE), several ASPSPs believe establishing a future entity should be the “first step” in the development of Open Banking.

Among stakeholders, there was consensus that “some form” of successor entity to the current OBIE would be required, even if there was “limited agreement on the nature, scope or authority of that entity”.

However, many stakeholders were in agreement that the future entity should assume the role of a central standard-setting body to develop and maintain future Open Banking Standards.

Stakeholders exhibited divergent views on several other areas of Open Banking, including variable recurring payments for non-sweeping use cases, a future funding model, as well as ecosystem reliability, fraud and data sharing in the future.

The report from the SWG secretariat for the Joint Regulatory Oversight Committee is the result of the strategy sprints held last year to enable the industry and stakeholders to input into the vision for the future of Open Banking.

Bryan Zhang, independent chair of the Open Banking Strategic Working Group, wrote: “It was also apparent that many key issues are complex and fluid; firms and institutions can harbour highly nuanced perspectives and it would be wrong to assume homogeneity in any stakeholder group or even within an organisation; and while the evidence did highlight the existence of divergent views, common ground and areas of alignment were also to be found.”

Discussions around the reliability of the UK’s ecosystem revealed that evidence pointed to a “possible API availability and performance gap”.

According to the report, some respondents felt that firms’ APIs had been performing well, improved over time and were meeting their obligations, yet others were “frustrated” by the inconsistency of API provisioning and argued that further improvement was required to provide a more stable and reliable platform for Open Banking.

The strategy sprints also uncovered different perspectives on the future of Open Banking in the UK, with most ASPSPs who participated saying that further evolution of the Open Banking ecosystem needs to be “underpinned by reasonable commercial returns” and that the market should determine the development path.

While some trade associations and TPPs echoed this “market-centric vision of the future”, the SWG also reported that many TPPs expressed concerns about relying solely on market forces to steer the development of the Open Banking ecosystem.

Stakeholders were also split when it came to the sharing of potential additional data sets, as Open Banking moves into Open Finance.

The SWG found “significant divergence”, with responses from TPPs indicating a focus predominantly on expansion initially into adjacent financial products, including savings and investments, which would provide TPPs with a holistic view of a consumer’s financial situation.

Banks, on the other hand, identified access to sources of government-held identity attributes as more important, as this could be used to improve onboarding, verify identity and reduce fraud, they argued.

However, the SWG’s report stated: “Many respondents noted that it would be helpful for future data-sharing developments in Open Banking to have a clear pathway to Open Finance and progressively align to the strategic work being undertaken by the Government on developing Smart Data.”