UK Updates On New Open Banking Entity
Recently, the UK authorities have announced an update on plans for a successor to the Open Banking Implementation Entity (OBIE).
The OBIE was established in 2017 following an order by the Competition and Markets Authority (CMA), by the UNK’s nine leading banks to incorporate the open banking system.
With Open Banking thoroughly set up, the OBIE presently directed by the CMA will be progressed to a new entity in the upcoming year and this will be monitored by the new Joint Regulatory Oversight Committee, which was created earlier this year by the CMA along with HM Treasury, the Financial Conduct Authority and the Payment Systems Regulator.
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The committee is presently dealing with fostering the vision for the future of Open Banking and the plan for the future entity. As per the committee, Open Banking ought to advance more prominent competition and innovation to help customers, companies and the wider economy. It has distinguished three priorities to realize this vision:
1. Revealing the capability of Open Banking payments to aid competition & innovation by making noteworthy decisions between payment methods and the structure of the next generation of payments, including more productive & tailored services.
2. Taking on a model which is versatile for future data-sharing suggestions
3. Laying out a sustainable balance for the continuous improvement of the Open Banking ecosystem.
A strategic administrative group, controlled by Bryan Zhang, is set to report back to the council on a few complexities in January.
With respect to the plan of the future entity, the controllers expect its liabilities should include:
1. Empowering the development of new Open Banking products & service propositions and supporting innovation & competition within the financial services sector that can help consumers and businesses & support economic development in the UK.
2. Providing & keeping up with the technical frameworks and essential services for Open Banking, as well as improving & creating existing and new technical standards.
3. Guaranteeing compatibility with the exercise of other important factors in the ecosystem, for example, Pay.UK according to Faster Payment scheme rules.
To ensure it can work properly, the council is finalizing the entity’s design, with a long-term administrative framework set up to take into consideration of the CMA Order to be varied or revoked.
On financing, the update says, “In the long-term, the financing & liability arrangements of the future entity should be broad-based and fair with the financing of the entity shared across all clients in a productive and proportionate manner that mirrors the level and design of the fundamental costs.”
Finally, on administration, “The entity ought to be free and supported by a bunch of values and cultures including a focus on reliability and supporting ethical behaviours.”
Committee co-chairs, the FCA's Sheldon Mills, and the PSR’s Chris Hemsley stated, “Open Banking & its future keep on being fundamentally important for the FCA and the PSR. Along with the board & industry, we are dedicated to its progress with development and advancement. Completely realized, Open Banking and then open finance can ensure further benefits to consumers & businesses and will assist the UK with becoming more competitive and innovative.”
“This implies supporting new use cases, supporting innovation and competition in data sharing & payments, and setting the vision for future developments. We will, with the other members of the committee, work intimately with industry and big stakeholders to establish a future entity that will provide these results.”