Open Banking was launched in the UK in 2017 as part of a package of improvements following the Competition and Markets Authority (CMA) market investigation into retail banking. The CMA ordered the UK’s 9 largest retail banking providers to open up customer data using secure data protocols. To achieve this result, banking providers were required to establish an independent Open Banking Implementation Entity (OBIE), currently overseen and chaired by Charlotte Crosswell OBE as Implementation Trustee. A roadmap setting out the specific requirements of the 9 banking providers was launched.
Following a report by the Implementation Trustee, the CMA has determined that the 6 largest UK banking providers (Barclays, HSBC, Lloyds, Nationwide, NatWest and Santander) have now implemented all the requirements of the Open Banking Roadmap, and the Roadmap is therefore substantially complete.
Open Banking allows consumers and businesses to share their transaction data securely with trusted third parties, who can provide customers with applications and services that save them time and money. In a market where the largest and most established banks have represented more than 80% of the checking account market for many years, Open Banking improves financial decision making for consumers and reduces costs for small and medium-sized businesses, boosting competition. and innovation. Open Banking now has over 6 million active users in the UK who will continue to benefit as Open Banking reaches this important milestone. Open Banking is widely recognized as a great success, and many other countries are considering similar open standards.
Despite having implemented the Open Banking Roadmap requirements, all 6 banking providers have ongoing obligations under the CMA Retail Banking Order, to enable customers to securely access their data and benefit from Open Banking. The OBIE will continue to ensure that the 6 banking providers maintain the required standards and will promote Open Banking to encourage industry adoption.
Alongside this, the OBIE will continue its work to ensure that the remaining top 3 banks (Allied Irish Bank, Bank of Ireland and Danske) that have not fully implemented the Open Banking Roadmap requirements do so as soon as possible. To support the OBIE in this, the CMA will consider the application of appropriate measures to ensure that this happens in a timely manner.
Together with the OBIE, the CMA will continue to work with the government and other regulators to support a smooth transition of the work carried out by the OBIE under the direction of the CMA to a future entity that can expand the benefits of Open Banking beyond the scope of the CMA Order. The Joint Regulatory Oversight Committee (JROC), created in March 2022 and made up of HM Treasury, CMA, Financial Conduct Authority (FCA) and Payment Systems Regulator (PSR), will promote Open Banking and set its recommendations on the design of the future Open Banking entity in the first quarter of 2023.
Sarah Cardell, Executive Director of the CMA, said:
It’s great to see how many consumers have benefited from Open Banking since the CMA Order was issued in 2017, which has transformed the way millions of people manage their money.
Today’s update is a major milestone. The UK’s largest banking providers have completed the roadmap, bringing Open Banking into a new phase.
We will continue to ensure that the standard is upheld and that providers meet their obligations under the CMA Order, including ensuring that the remaining banks meet the same data sharing standard.
The work of the OBIE is vital to the continued success of Open Banking and we look forward to continuing to work closely with the FCA, PSR and HM Treasury to help achieve future arrangements for Open Banking.
Notes to editors
Open Banking now has over 6 million active users in the UK.
The Payment Services Regulations 2017 (PSR), which implemented PSD2 in the UK, took open banking further by providing a legal right for trusted third-party providers to access payment accounts accessible online, whenever with the explicit consent of the client. All account providers must allow TPPs to access payment account details and make the payment.
OBIE previously announced that Charlotte Crosswell will step down as Implementation Trustee on January 31, 2023. The CMA has been actively recruiting a new Implementation Trustee to oversee OBIE’s next phase of work. This process is expected to conclude shortly.
The CMA’s market research in the Retail Banking Market Research found separate Adverse Effects on Competition (AEC) in the retail banking markets in both Great Britain (GB) and Northern Ireland (NI). . The CMA implemented the Retail Banking Market Investigation Order 2017 (the Order) to remedy these AECs). The Open Banking remedy in Part 2 of the Order required the 9 largest banking providers by market share in GB and NI (the CMA9) to set up and fund the OBIE to develop common open product and technical data standards of read-only and read-write, open and common banking standards for the secure exchange of transaction data. CMAs9 are required to grant free access to this data to Third Party Providers who, using this data, can provide services to consumers to address AECs.
The Order established the high-level requirements for Open Banking. Detailed technical requirements for developing and implementing the read-only and read-write data standards were set out in the Open Banking Roadmap documents. The most recent iteration of the Open Banking Roadmap was published in May 2020 (Notice of Approval for Changes to the Agreed Schedule and Project Plan).
The CMA wrote to the OBIE in April 2022 and then in August 2022 regarding the conditions that must be met for the implementation of the Roadmap phase to be considered complete.
The Joint Regulatory Oversight Committee (JROC) issued its initial joint statement in March 2022 and its most recent statement on the future of Open Banking was published in December 2022.
- In this statement, ‘Allied Irish Bank’ refers to Allied Irish Bank (GB), ‘Bank of Ireland’ refers to Bank of Ireland (UK) plc, ‘Danske’ refers to Northern Bank Limited, trading as Danske Bank , ‘HSBC’ refers to HSBC Group, ‘Lloyds’ refers to Lloyds Banking Group, ‘Nationwide’ refers to Nationwide Building Society and ‘NatWest’ refers to NatWest Group.
- For media inquiries, please contact the CMA press office on 020 3738 6460 or [email protected].