CMA announces next steps on future oversight of Open Banking

Friday 25 March 2022 13:34 CET | News

The Competition and Markets Authority (CMA) has published its recommendations for the future oversight and governance of Open Banking.

The CMA’s recommendations will be taken into consideration in the design of a future entity to succeed the Open Banking Implementation Entity (OBIE). The future entity would build on the progress made to date by the OBIE to encourage innovation and support competition in retail banking.

The CMA, HM Treasury, the Financial Conduct Authority (FCA), and Payment Systems Regulator (PSR) have also published a joint statement outlining their plans for oversight of the future entity, building on the CMA’s recommendations, including the establishment of a Joint Regulatory Oversight Committee.

As of January 2022, there were over 5 million users of services powered by Open Banking technology in the UK. It has been estimated that by September 2023, 60% of the UK population will be using Open Banking payments.

The CMA launched a public consultation on the future oversight of Open Banking in March 2021. The consultation sought views on what arrangements should be put in place to ensure effective oversight and governance following the implementation of the remaining measures in the Roadmap required under the CMA’s Order for Open Banking; and how the CMA should manage the transition process towards this new governance model. The CMA has carefully considered the responses to the consultation ahead of publishing its response.

The CMA’s recommendations are that the future entity should:

  • have effective regulatory oversight, with a new Joint Regulatory Oversight Committee to agree and implement the next steps led jointly by the FCA and PSR;
  • have independent and accountable leadership, with a majority of independent directors on its Board;
  • have a clear purpose articulated by the Board;
  • be adequately resourced to carry out its functions through a more broadly-based and sustainable funding model;
  • effectively serve the interests of consumers and small and medium sized businesses, including consideration for how these groups will be represented in the governance of the entity;
  • be sustainable and adaptable to the future needs of the sector;
  • have a system to effectively support the monitoring and enforcement of the Retail Banking Market Investigation Order 2017.
The joint statement outlines that the Joint Regulatory Oversight Committee will draw up proposals for the design of the future entity by the end of 2022.

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Keywords: Competition and Markets Authority, Open Banking, regulation
Categories: Banking & Fintech
Countries: United Kingdom
This article is part of category

Banking & Fintech