The UK government and The Joint Regulatory Oversight Committee (JROC) are pushing forward with the next phase of open banking in the UK, releasing a report of recommendations to a new entity (replacing the current OBIE – Open Banking Implementation Entity). The report comes as open banking is hitting mammoth numbers in the UK with 750,000 businesses and seven-million consumers accessing the service to manage their money and make payments – an upwards trend with over 68 million payments made in 2022 up from 25 million in 2021. The JROC have set out an ambitious roadmap in their report focusing on a few main themes:
- Continue to grow Open Banking while the future entity is being formed.
- Focus on security and making things more accessible and cheaper for consumers.
- Better understanding of consumer and industry experts needs.
The entity has identified three key priorities to deliver the best possible product:
- to establish a sustainable and competitive footing for the ongoing development of the open banking ecosystem so that it can grow beyond the current functionalities and bring further benefits to end users
- to unlock the potential for open banking payments
- to adopt a model that is scalable for future data sharing propositions
The entity hopes that by providing this, it will create greater innovation, lower prices and costs, and Improved services through competition.
The transition to the future entity is still planned for later this year, but, it’s thought the full transition could take some time. However, to continue to make headway in the space the current group will continue to leverage the benefits of open banking while improving it as a whole – including tasks like improving data collection for financial crime.
The Joint Regulatory Oversight Committee (JROC) has two immediate priorities: to establish alternative arrangements for non-Order activities; and finalizing the design of, and begin the transition to, the future entity, including its appropriate corporate structure.
The committee also will be working with open banking participants to establish a range of options for the structure, governance and funding of the future entity.
The JROC has identified five themes to focus on progressing over the next two years:
- levelling up availability and performance
- mitigating the risks of financial crime
- ensuring effective consumer protection if something goes wrong
- improving information flows to TPPs and end users
- promoting additional services, using non-sweeping variable recurring payments (VRP) as a pilot
Next steps for the JROC are to summarize proposals and work with stakeholders to develop the design of the future entity. A first progress report is expected Q4 of 2023.
Find the full report here.
