Outgoing OBIE trustee calls for long-term vision for Smart Data ecosystem in the UK

Ellie Duncan
01 Feb 2023

Ecosystem reliability, fraud interventions by UK banks and the lack of a long-term vision for a Smart Data economy – these are among the “unresolved systemic issues” flagged as immediate priorities for the Joint Regulatory Oversight Committee (JROC) by outgoing Open Banking Implementation Entity (OBIE) trustee Charlotte Crosswell.

Crosswell made a number of recommendations for the future of Open Banking in the UK, in the ‘Trustee End of Implementation Roadmap Report’ published on her final day in the role, 31 January.

Crosswell said that one of the “impediments to progress” has been the absence of a clear cross-department vision for developing the UK into a Smart Data economy. This would give individuals and businesses rights access to their data.

“Whilst significant progress has been made, there is still much more to do to optimise and deliver the full benefits of Open Banking within retail banking markets, and beyond,” said Crosswell.

She suggested that, as an immediate priority, JROC should consider developing a long-term vision for expanding the current Open Banking ecosystem “to a full Smart Data ecosystem that aligns to the UK Payment Strategy and emerging Digital Identity strategy”.

With the implementation phase of the Competition and Markets Authority’s Order at an end and the Roadmap complete, Open Banking Limited (OBL) and the trustee have been preparing for the transition to a future entity, which is yet to be defined by JROC.

However, in her report, Crosswell said that a decision on the governance, remit and funding model of the future entity will be “needed by the end of June”.

The period between the current state and a future long-term regulatory framework is being referred to as the “interim state”.

During this time, OBL will continue to be overseen by the CMA and will monitor banks which are yet to implement the remaining requirements of the Roadmap.

In her final report, Crosswell said that the JROC Strategic Working Group interim report highlighted some “unresolved systemic issues” and several risks to Open Banking during the ‘interim state’ that may pose a threat to the success of the CMA Order. She called for these to be addressed “immediately”.

Furthermore, in her report, Crosswell pointed to a significant risk that investment in the UK fintech sector could slow if the Open Banking Standard doesn’t evolve or these systemic issues remain unresolved.

According to the report, less than three in 20 digitally active UK adults use Open Banking-enabled services and growth in AIS users has stalled, while Open Banking Payments are only used in a limited number of use cases.

There is a need to maintain confidence in the Open Banking project more broadly, as the roadmap is completed, and “the transition approach specifically”.

“Marion King, OBL’s incoming trustee, will now steer OBL through the next phase in its transition journey. I hope that my recommendations and personal views will be useful as the CMA and JROC decide how to ensure the many benefits of Open Banking is sustained and developed going forward,” said Crosswell.

Feature: Open Banking in the UK – an ‘unfinished experiment’