UK Finance has published a proposal for a “new service company” that will support the UK’s open banking infrastructure, according to a public statement. UK Finance is described as the collective voice for the banking and finance industry representing over 250 firms in the UK.
Last year, UK Finance suggested a model which would see the continuation of open banking functions moved into a new service company as the final stages of the Competition and Market Authority’s (CMA) implementation roadmap. The publication, Open Banking Futures: Blueprint and Transition Plan, is a proposal for a “smooth transition from the current Open Banking Implementation Entity (OBIE).”
The “Future Entity” is a yet-to-be-labeled company that may usher in this transition. According to the document the mission is as follows:
- The Future Entity prioritises end-users’ outcomes and promises to be at the heart of the Open Data and Payments market.
- The vision states it will exist to “enable UK consumers, small businesses and corporates to benefit from a highly efficient, safe and reliable Open Data and Payments market, as well as continuing to provide a platform for UK financial institutions to meet their regulatory requirements”.
The proposed services are said to take into account the requirements made by the CMA of the UK’s largest nine banks, known as the CMA9. It also ensures there is room for flexibility to accommodate changes outside of OB and into other parts of finance and other industries, such as Open Finance and Smart Data.
The new company hopes to enable UK consumers, small businesses, and corporates to benefit from an efficient, safe, and reliable Open Data and payments market, as well as adhering to regulatory obligations.
Jana Mackintosh, Managing Director of Payments at UK Finance, issued a statement saying Open Banking is a prime example of UKs position as a global leader in financial innovation.
“We know that it is vital that the industry works together to realise the opportunities for even greater innovation of a new generation of banking-related products and services. Our proposed model for the future service company will help facilitate these exciting developments for years to come.
The service company will have a board comprised of an independent chair and a mix of independent, consumer and industry representatives. An advisory committee made up of member representatives and stakeholders, such as end-user representatives, industry bodies and regulators, will advise the board.”
In response to UK Finance’s report, Freddy Kelly, CEO and founder of Credit Kudos, stated:
“The Open Banking Implementation Entity (OBIE) has been crucial in supporting the roll out and acceleration in the UK. UK Finance’s proposals for a new body to build on the work of OBIE is an important step for the next stage in data-driven financial services in the UK. A focus on Open Finance, supported by the creation of the Futures Board, will enable continuous delivery of more innovative and personalised financial products for individuals and small businesses – much needed in today’s climate.”
The report estimates that any transition to the future entity will run until Q1 2022.