Concerns Over Market Presence of Open Banking Future Entity
The future oversight of open banking in the UK is currently under discussion, but experts are conscious of the need for the “future entity” to walk the line between playing an outsized role and becoming just a talking shop for policy.
The Competition and Markets Authority (CMA) is currently consulting on the shape of the body to replace the Open Banking Implementation Entity (OBIE), following the expected completion of the Open Banking Order at the end of 2021.
Although some aspects of the order are still to be achieved before that time — including recurring payments, sweeping payments, and a standard for directory services — those involved are already looking ahead to how the OBlE’s replacement can further develop open banking and beyond.
“Over the last three years, we have made significant progress developing a world-leading infrastructure, and as the final pieces are falling into place, we recognise that work needs to be done to ensure the open banking framework is correctly structured beyond the implementation itself," lmran Gulamhuseinwala, implementation trustee for the OBIE, told VIXIO.
“This is particularly key for the evolution of Open Finance and Open Data."
Among the issues which the future entity will need to address is ensuring that it enables competition in the sector rather than using its privileged position to dominate certain segments.
“One of the things we’ve been quite vocal about is that when OBIE moves from being a Special Purpose Vehicle into something different, how can we ensure that a level playing field is then created?" Brendan Jones, chief operating officer at Konsentus, told VIXIO.
He pointed to the fact that the future entity’s funding by the CMA9 — the nine largest banking groups in the UK, to which the original Open Banking Order applied — places it largely beyond commercial concerns and so it could seize a “lion’s share" of the market in ancillary open banking services…
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