CMA delays open banking decision to 2022 as it ‘takes stock’ of recent bullying scandal
Hinting that a “sector-wide levy” will be used to fund the future of open banking.
We’re going to have to wait a bit longer to find out the future direction of open banking and open finance in the UK.
Late last week, the Competition And Markets Authority (CMA) revealed that the recent report into the governance failings of the Open Banking Implementation Entity (OBIE) and appointment of a new Trustee had led it to delay publishing its direction on a future entity to succeed the OBIE.
“We consider that it is necessary both to take a number of immediate steps but also to take stock of the implications on the appropriate approach to future oversight and governance,” the CMA wrote.
As part of the failings of the OBIE, the CMA has triggered a review into how it designs and creates such organisations, led by one of its non-executive directors.
All of this will obviously delay the expected announcement on the future of open banking.
Instead, the CMA now plans to publish a “joint vision” with the FCA and PSR on the future of open banking later this year to cover any regulatory gap between the OBIE and its successor, followed by its detailed position on the future entity at the end of 2021 or early 2022.
The CMA’s letter also hinted at the structure of the future entity, saying that it sees value in “a sector-wide levy” to fund such an organisation and identifies that it sees the growth of “account-to-account payments” as a key part of the future of open banking.
TrueLayer’s head of public policy Jack Wilson said the scale of the CMA’s plans for the future entity would require “the entity having adequate resources at its disposal, so it is also positive to see the CMA support the design and implementation of a more broadly-based and sustainable funding model, particularly in respect of ‘membership’ contributions.”
Still, without the details, many questions remain around the funding, governance, powers and direction of this still-unnamed future entity.
Hopefully, later this year, or early next year, we might start getting some answers.