UK Finance proposes next steps for open banking
A future model for how the UK’s world-leading Open Banking (OB) functions can continue and progress once the current implementation phase ends early next year is set out today in a new report, Open Banking – Future State, by UK Finance in association with Accenture.
Open Banking is a secure way to share financial information across multiple providers and is used in products such as account aggregation, where customers who have accounts across multiple banks can see all their account information in one place. The banking and finance industry has invested an estimated £1.5 billion in infrastructure since the launch of Open Banking in 2016 by nine of the largest banks, known as the CMA91, and Payments UK, which is now part of UK Finance.
The Competition and Markets Authority (CMA) final OB implementation roadmap is due to end in early 2021, with the banking and finance industry then required to keep the OB function running. The new report sets out how this transition could be achieved and proposes that at the end of the current roadmap, the OB functions are maintained and moved into a service company that is governed and funded by the wider banking and finance industry in a fair and equitable way. The goal of the next phase is to maintain what has been achieved and extend further in the future.
To ensure a fair and representative governance structure across the industry, the report recommends that the service company Board should consist of a mix of independent and industry experts with customer experience. It also suggests that the monitoring of the original CMA Order on the CMA9 remains separate from the service company, to enable the service company to adapt to future mandates subject to the promotion of competition.
Eric Leenders, UK Finance managing director, personal finance, said: “Open Banking is a significant technological and regulatory initiative which has huge potential for the future. It is vital that the Open Banking service community works together to ensure that the transition from the current roadmap to a more permanent plan is smooth, enabling the UK to maintain its world leading position in Open Banking as it develops.”
Tom Graham, managing director in Accenture’s UK banking practice, said: “As the power of open banking continues to gain momentum and drive welcome innovation in the UK for the benefit of consumers, community collaboration is vital to ensuring this continues. This report lays out the next steps for building on the highly successful foundations the UK has built – maintaining the country’s technical lead, supporting business models built on this infrastructure, whilst considering what might come next.”
