U.K. authorities have outlined a vision for the future of open banking in the country.
The Joint Regulatory Oversight Committee (JROC), which is led by the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR), has published its vision for the next stage of open banking, according to a Friday (Dec. 16) announcement.
The JROC has convened a working group to gather and assess different stakeholder views on current gaps in open banking, potential short- and long-term solutions, and the structures required to further develop financial data sharing, the announcement stated.
Reflecting the fact that open banking application programming interfaces (APIs) have now been implemented by the U.K.’s banks, the Open Banking Implementation Entity (OBIE), which helped usher in the current wave of innovation in the space, is set to be retired, according to the announcement.
In its place, a new authority will be formed with the long-term responsibility of regulating banks and other players in the wider open banking ecosystem. Funding for the entity will be shared “across all users in an efficient and proportionate way,” the JROC stated in the announcement.
The current OBIE is funded by a group of banks known as the CMA 9, which consists of Allied Irish Bank, Bank of Ireland, Barclays, Danske, HSBC, Lloyds Banking Group, Nationwide, Natwest Group and Santander.
In Friday’s statement, the JROC said that the new entity should be responsible for supporting open banking innovation and competition, providing and maintaining the technical infrastructure and critical services for open banking, improving existing technical standards, and developing new ones.
While the OBIE was established when the U.K. was still a member of the European Union and has operated in concordance with the EU’s open banking regulation, PSD2, as the U.K. is preparing to replace it with a new authority, and it may further diverge from the EU’s rulebook.
In a joint statement, FCA Executive Director of Consumers and Competition Sheldon Mills and PSR Managing Director Chris Hemsley, who co-chair the JROC, said: “Open banking and its future continue to be a priority for the FCA and the PSR. Together with the committee and the industry, we are committed to its continued growth and evolution. …This means supporting new use cases, promoting innovation and competition in data sharing and payments, and setting the vision for future developments. We will, with the other members of the committee, work closely with industry and broader stakeholders to establish a future entity that will deliver these outcomes.”
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