The CMA, HM Treasury, the Financial Conduct Authority and Payment Systems Regulator have also published a joint statement.
The Competition and Markets Authority 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 will be set up to encourage innovation and support competition in retail banking.
The CMA, HM Treasury, the FCA and 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.
In 2017, Open Banking was launched in the UK as part of a package of remedies following the CMA’s market investigation into retail banking. It enables consumers and businesses to share their bank and credit card transaction data securely with trusted third parties who are then able to provide them with applications and services. In a market where larger, established banks have accounted for over 80% of the current account market for many years, Open Banking encourages account switching and helps to reduce costs for small and medium businesses, boosting competition and innovation.
As of January 2022, there were over 5 million users of services powered by Open Banking technology. It has been estimated that by September 2023, 60% of the UK population will be using Open Banking payments.
The CMA launched a 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’s recommendations are that the future entity should:
The joint statement states that the Joint Regulatory Oversight Committee will draw up proposals for the design of the future entity by the end of 2022.