Source: UK Finance
Open Banking (OB) provides a secure way for financial information to be shared across different finance providers. It enables services such as account aggregation, meaning customers who have accounts with a number of banks can see all of their account information in one place.
Last June, UK Finance suggested a model which would see the continuation of OB functions moved into a new service company as the final stages of the Competition and Market Authority’s (CMA) implementation roadmap come to an end this year.
Today, the detailed proposals of how this service company will operate and the process for a smooth transition from the current Open Banking Implementation Entity (OBIE) have been published.
The proposed service takes into account the requirements made by the CMA of the UK’s largest nine banks, known as the CMA9. It also ensures there is room for flexibility to accommodate changes outside of OB and into other parts of finance and other industries, such as Open Finance and Smart Data.
The new service company will enable UK consumers, small businesses and corporates to benefit from a highly efficient, safe and reliable Open Data and payments market, as well as continuing to provide a platform for UK financial institutions to meet their regulatory obligations under the CMA Order and PSD2.
The service company will provide a set of service capabilities which meet the needs of the OB ecosystem and help ensure its stability and resilience. These include managing the centralised OB directory, maintaining technical standards and enabling future improvements.
Jana Mackintosh, Managing Director of Payments at UK Finance, said: Open Banking is a prime example of the UK’s position as a global leader on financial innovation that benefits and protects the consumer. We know that it is vital that the industry works together to realise the opportunities for even greater innovation of a new generation of banking-related products and services. Our proposed model for the future service company will help facilitate these exciting developments for years to come.
The service company will have a board comprised of an independent chair and a mix of independent, consumer and industry representatives. An advisory committee made up of member representatives and stakeholders, such as end-user representatives, industry bodies and regulators, will advise the board.
The detailed proposals will be considered by the CMA in due course.