Open Banking, the UK Experience

The paper explains what open banking is, why the Competition and Markets Authority adopted it as a remedy and describes the arrangements the CMA required the 9 largest current account providers in Great Britain and Northern Ireland to put in place in order to implement it. The paper provides examples of open banking products which have been launched, both to save consumers and small businesses time and money and also to provide help and advice for financially stretched or vulnerable consumers. There are already over 3 million consumers and small businesses using these products each month and take-up has been particularly rapid among small businesses. The paper concludes with some learnings from the UK experience, the main one being that in the particular circumstances that the CMA encountered, the UK’s burgeoning open banking ecosystem is unlikely to have been created on a voluntary basis.

By Adam Land & Bill Roberts¹

I. INTRODUCTION

Open banking² allows consumers and small businesses to share their bank transaction data securely with trusted third parties who can then use this information to provide them with services that save them time or money.

The UK was the first country in the world to implement open banking but now around 60³ jurisdictions have either adopted it or are seriously considering doing so. This paper sets out the problems that the UK’s Competition and Markets Authority (“CMA”) was trying to address when we mandated open banking and the o