There are now over 6.5 million active users of Open Banking-enabled products in the UK, providing UK consumers and small and medium-sized enterprises (SMEs) with innovative products to help them better manage and make more of their money.
This marks a milestone that has benefited businesses, consumers, and the wider UK fintech sector. The Open Banking Implementation Entity (OBIE) now looks to the Joint Regulatory Oversight Committee (JROC) for their impending decisions on the future state and future entity, which will also integrate CMA input in relation to Order activity.
The completion of the CMA’s Roadmap is the result of a concerted effort and partnership between the OBIE, CMA9, the wider ecosystem, regulators, and government.
Following a requirement by the CMA in 2016 to deliver Open Banking, the OBIE was created by the nine largest current account providers in Great Britain and Northern Ireland (the CMA9). Since then, the OBIE has played a key role in the successful implementation of Open Banking in the UK.
Open Banking has transformed the payments and data landscape, enabling customers and small businesses to leverage their current account information securely with third party providers, who use that data to tailor their apps and services to peoples’ specific financial circumstances.
The UK’s approach in mandating and enforcing a single standard has allowed UK fintechs to overcome challenges faster than other European and competitor jurisdictions. In this time, the UK has created a collaborative ecosystem, with 246 regulated third-party providers in the UK compared to 338 in the whole European Economic Area.
Moreover, against the backdrop of a challenging economic environment – the COVID-19 pandemic and, more recently, cost of living rises – Open Banking has improved consumers and businesses financial resilience. The ecosystem has allowed for consumers and small businesses to reap these technological advances at a time of need.
Whilst significant progress has been made, more can be done to unlock the full benefits of Open Banking. Clear and unwavering support from policymakers and regulators has contributed to the UK’s success, and with important decisions on the future of Open Banking due soon, it will require ambition and leadership to enable similar benefits to more users, and other industry sectors.
Together with the OBIE, the CMA will continue to work with government and the other regulators to support a smooth transition of the work undertaken by the OBIE under the CMA’s order to a future entity that can expand the benefits of Open Banking beyond the scope of the CMA’s Order. The Joint Regulatory Oversight Committee (JROC), set up in March 2022 and comprising HM Treasury, the CMA, Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR), will take Open Banking forward and will be setting out its recommendations on the design of the future Open Banking entity in Q1 2023.
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