UK authorities have published an update on plans for a successor to the Open Banking Implementation Entity (OBIE).
Following an order by the Competition and Markets Authority (CMA), the OBIE was set up in 2017 by the UK's nine biggest banks to implement the open banking regime.
With Open Banking well established, the OBIE, currently overseen by the CMA, will be transitioned to a new entity next year. That will be overseen by a new Joint Regulatory Oversight Committee, which was formed earlier this year by the CMA along with HM Treasury, the Financial Conduct Authority and the Payment Systems Regulator.
The committee is currently working on developing the vision for the future of Open Banking and on the design of the future entity. Open Banking, says the committee, should promote greater competition and innovation for the benefit of consumers, businesses and the wider economy. It has identified three priorities to deliver this vision:
- Unlocking the potential of Open Banking payments to support competition and innovation by creating greater choice between payments methods and the building of the next generation of payments, including more efficient and tailored services
- Adopting a model that is scalable for future data sharing propositions
- Establishing a sustainable footing for the ongoing development of the Open Banking ecosystem
A strategic working group, chaired by Bryan Zhang, is set to report back to the committee on some of the issues in January.
As for the design of the future entity, the regulators say they expect its responsibilities to include:
- Enabling the development of new Open Banking product and service propositions and support innovation and competition within the financial services sector which benefit consumers and businesses and support economic growth in the UK
- Providing and maintaining the technical infrastructure and critical services for Open Banking, as well as improving and developing existing and new technical standards
- Ensuring compatibility with the activities of other key actors in the ecosystem, e.g., Pay.UK in relation to Faster Payments scheme rules
To ensure it can work effectively, the committee is finalising the entity's design, with a long-term regulatory framework in place to allow for the CMA Order to be varied or revoked.
On financing, the update says: "In the long-term, the future entity’s funding and liability arrangements should be broad-based and equitable with the funding of the entity shared across all users in an efficient and proportionate way that reflects the level and structure of the underlying costs."
Finally, on governance: "The entity should be independent and underpinned by a set of values and cultures that include an emphasis on integrity and promoting ethical behaviours."
Committee co-chairs, the FCA's Sheldon Mills, and the PSR’s Chris Hemsley, say: "Open banking and its future continue to be a priority for the FCA and the PSR. Together with the committee and industry, we are committed to its continued growth and evolution. Fully realised, open banking and then open finance can bring further benefits to consumers and businesses and will help the UK become more competitive and innovative.
"This means supporting new use cases, promoting innovation and competition in data sharing and payments, and setting the vision for future developments. We will, with the other members of the committee, work closely with industry and broader stakeholders to establish a future entity that will deliver these outcomes."