Millions of customers benefit as Open Banking reaches milestone

The UK government has published a press statement to announce the reaching of a milestone in its roadmap to open banking in the country. Specifically, six of the nine largest banks in UK – including Barclays, HSBC UK Bank plc, Lloyds Banking Group, Nationwide Building Society, NatWest Group and Santander – have now completed all requirements under the roadmap to share their banking data with other financial market participants using predefined standards. The three remaining banks, namely Allied Irish Bank, Bank of Ireland, and Danske Bank, will follow suit as soon as practically feasible.
Open Banking, generally speaking, requires financial institutions to share their data with third party service providers – upon consent of clients – which themselves can offer (supplementary) services to bank customers, e.g. the offering of budgeting tools or the offering of mortgages. Data is thereby transferred via secured protocols among participants. The key entity responsible for the oversight of the implementation of the roadmap and thus the implementation of the data transfer and access is the Open Banking Implementation Entity (OBIE) which is currently administered by the Competition and Markets Authority, but shall soon be managed by a joint regulatory oversight committee (JROC), a cross-authority committee“ comprised of members of the FCA, HM Treasury, the Competition and Markets Authority (CMA), and the Payment Systems Regulator (PSR).
As far as the future of open banking is concerned, the government notes that the prime focus in the near future will lay on the supervision of the six banks in their efforts to share their data and – of course – on measures to get the remaining three banks onboarded and fully compliant with the requirements. In the middle to long term, the ROC will work on a corresponding regulatory framework to govern open banking and on taking the idea of open banking even further.