UK Competition and Markets Authority publishes update on Open Banking

Monday 8 November 2021 12:32 CET | News

UK’s CMA has published an update on Open Banking to set out progress in strengthening corporate governance at OBIE following an independent investigation and CMA’s consideration on the future governance of Open Banking.

Open Banking is a key step towards unlocking competition in retail banking and the evolution of the UK’s fast-growing innovative financial technology (fintech) sector – changing the face of retail banking for the benefit of millions of customers and small businesses. Open Banking was initiated in 2017 by the Competition and Markets Authority (CMA) following its market investigation into retail banking; and the CMA is committed to ensuring its continued success. 

Taking immediate steps to improve current governance is a priority for both the CMA and OBIE, following the issues highlighted in the investigation report by Alison White published in October 2021. This is important to secure and build on the significant achievements in Open Banking that have been made to date and that are possible in the future. Progress is being made with the appointment of a new Implementation Trustee and the first non-executive director (NED) in place, and further changes are planned.

In this update, the CMA also looks ahead to the longer-term future of Open Banking. Its powers under the Retail Banking Market Investigation Order 2017 will change as the implementation phase comes to an end over the course of 2022. The CMA will retain some direct regulatory powers including regarding the ongoing maintenance of Open Banking and monitoring compliance, however there will need to be an effective longer-term framework for the future. In this update we set out several key high-level principles which we consider should underpin the future arrangements of Open Banking, and the CMA will be publishing a further, more detailed, update responding to its consultation at the end of 2021/early 2022.

Given there are much wider potential benefits in applying Open Banking beyond retail banking, including driving competition in payments and the broader financial sector, moving forward it will also be important for there to be a clear regulatory vision supported by cooperation from wider industry and stakeholders. CMA is also working with other regulators to publish a statement of our joint regulatory expectations alongside the CMA’s consultation response.

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Keywords: Open Banking, regulation, retail banking, banks, fintech
Categories: Banking & Fintech
Countries: United Kingdom
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