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Open Banking Standards to Expand Functionality and Cover all PSD2 Products

The Open Banking Implementation Entity (OBIE), the body set up by the Competition & Markets Authority (CMA) to enable a new, secure way for customers to take control of their financial data and share it with organisations other than their banks, today announces a series of important enhancements to its original scope as set out in the CMA Order (published in August 2016).

As referenced in the Chancellor of the Exchequer’s Autumn Budget today, the OBIE has now been asked by the CMA9 and Her Majesty’s Treasury to create open banking standards for all payment account types covered by the European Union’s second Payments Services Directive (PSD2). This means customers using credit cards, e-wallets and prepaid cards will also be able to take advantage of open banking services. In parallel, the CMA has today approved amendments to the agreed arrangements under the CMA Order, to include a programme of enhancements to ensure that Open Banking delivers maximum benefits for retail customers and SMEs.

The Open Banking project was created in 2016 by the CMA to bring competition and innovation to the personal and small business current account markets. The CMA mandated the nine largest current account providers in Great Britain and Northern Ireland (the ‘CMA9’) to create the OBIE and work with it to build a common set of API standards that would allow regulated companies safe and secure access to their accounts with the explicit permission of the customer.

The enhancements announced today will build on the core requirements of the CMA Order, which come into force in January 2018, and form a programme of releases throughout 2018 and into 2019.

Imran Gulamhuseinwala, Trustee of the OBIE, said:

“This is a truly innovative project and the UK is leading the world in opening up the banking system to new services and, ultimately, re-shaping it around the customer. Key to any innovation is the process of discovery and it became clear through the second half of 2017 that there is much more the OBIE could do to drive adoption of Open Banking and create a richer environment for new services. These enhancements should give even greater confidence to the FinTech community to seize the opportunity to participate fully in the financial services ecosystem.

“They will create standards for future dated, recurring and international payments as well as all the payment and product types covered by PSD2. These enhancements will maximise the benefits of open banking services for the customer. The OBIE will continue to work with the CMA, HMT, CMA9 and other stakeholders to drive this forward.”

Adam Land, Senior Director at the CMA, commented:

“Today’s announcement is a major milestone in the delivery of open banking, which will transform UK banking for retail customers and small businesses. This will make it easier for customers to manage their money, find the best deal for their needs and avoid overdraft charges.

“There is huge interest globally in the way that UK regulators have worked together with the banking industry, the FinTech sector, consumer groups and others to drive this project forward at pace. This plan, which the CMA has approved today, is both deliverable and bold in scope.”

The full details of the enhancements will be made available today on the Open Banking website which can be accessed here.

A copy of the CMA’s Notice of approval of changes to the Agreed Timetable and Project Plan will be made available today on the CMA website which can be accessed here: https://www.gov.uk/cma-cases/review-of-banking-for-small-and-medium-sized-businesses-smes-in-the-uk.

For further information, please contact:

Richard Lindsay                        richard.lindsay@openbanking.org.uk                  (0)7979 592 156

Emma Byrne                             emma.byrne@openbanking.org.uk                      (0)7775 657 241 

About Us

Open Banking is a new, secure way for customers to take control of their financial data and share it with organisations other than their banks.  Open Banking has the power to revolutionise the way we move, manage and make more of our money.  For businesses, it is about making the management of cashflow and receiving payments cheaper and easier.  Open Banking will make things simpler, faster and more convenient.

Open Banking follows the Competition and Markets Authority (CMA) investigation into the supply of personal current accounts (PCAs) and of banking services to small and medium-sized enterprises (SMEs).

Open Banking was created to enable innovation, transparency and competition in UK financial services. It is tasked with delivering the Application Programming Interfaces (APIs), data structures and security architectures that will enable developers to harness technology, making it easy and safe for individuals and SMEs to share the financial information held by their banks with third parties.

Open Banking will bring substantial benefits. It gives customers and SMEs greater market choice and greater control over their money and associated data, along with better and easier access to new financial services providers in a secure environment.

Notes to Editors:

  1. Open Banking Ltd was set up by the Competition & Markets Authority (CMA) in September 2016 to fulfil one of the remedies mandated by the CMA following an investigation into UK retail banking.
  2. The CMA’s investigation into the retail banking market (whose findings were published in August 2016) concluded that older and larger banks do not compete hard enough for customers’ business and that Open Banking should deliver a new, secure option for customers to be able to compare the deal they are getting from their bank.
  • Today’s announcement relates to Section 10.6 of the Retail Banking Market Investigation Order 2017 (“the Order”, “CMA Order”).
  1. Open Banking was created to enable innovation, transparency and competition to UK financial services. It is tasked with delivering the Application Programming Interfaces (APIs), data structures and security architectures that will make it easy and safe for customers to share their financial records by January 2018.
  2. The data provided by Open Banking will enable developers to harness technology that allows individuals and businesses to share their financial records held by their banks with third parties.
  3. Open Banking is a private body; it’s governance, composition and budget was determined by the CMA. It is funded by the UK’s nine largest current account providers and overseen by the CMA, the Financial Conduct Authority and Her Majesty’s Treasury.
  4. The 9 mandated institutions (referred to as the CMA9) are: Barclays plc, Lloyds Banking Group plc, Santander, Danske, HSBC, RBS, Bank of Ireland, Nationwide and AIBG.
  5. Imran Gulamhuseinwala has been appointed as the Implementation Trustee (the “Trustee”) for Open Banking Limited (“Open Banking”). Mr Gulamhuseinwala is seconded to Open Banking on a part-time basis from Ernst & Young LLP (“EY”). During this secondment period, Open Banking makes Mr Gulamhuseinwala available to act as Trustee, an appointment that he has accepted in his individual capacity and not as a Partner of EY. EY shall therefore have no liability whatsoever to (i) Open Banking howsoever arising for any loss caused to Open Banking due to acts or omissions of Mr Gulamhuseinwala during the secondment period; and (ii) any third party howsoever arising for any losses caused to that third party due to acts or omissions of Mr Gulamhuseinwala during the secondment period.