The UK’s Competition and Markets Authority (CMA) has launched a consultation on the future governance of Open Banking. Open Banking is an initiative launched by the CMA in 2017 following its Retail Banking Market Investigation. It allows consumers and SMEs to share their bank account information securely with trusted intermediaries who can then use this information to help them save time and money by finding better products to suit their needs. In turn, open banking aims to place competitive pressure on the larger, established banks who have accounted for over 80% of the current account market for many years.
Since its establishment, Open Banking now has around 3 million active users and it is estimated that more than half of small and medium businesses use tools employing open banking functionality.
In order to implement open banking, the CMA required the 9 largest current account providers in Britain and Northern Ireland respectively to create and pay for an implementation entity – known now as the Open Banking Implementation Entity – and to appoint an implementation Trustee, approved by the CMA, to oversee the process.
The implementation phase of open banking is nearing completion and the CMA is now consulting on what arrangements should be put in place for its governance in the next phase of its development.
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