The Joint Regulatory Oversight Committee (JROC), a collaboration made up of the FCA, the Payment Systems Regulator (PSR), the CMA and the Treasury, has outlined its roadmap to take forward recommendations for the next phase of open banking in the UK.
The roadmap includes setting up dedicated workstreams to action the key themes and priorities outlined in the “Recommendations for the next phase of open banking in the UK” paper published in April.
The JROC has tasked Open Banking Limited ("OBL") to lead and coordinate a number of workstreams, including:
- levelling up availability and performance;
- mitigating the risks of financial crime;
- developing proposals for dispute processes; and
- improving information flows to third party providers (TPPs) and end users.
The JROC has written to OBL setting out specific activities to progress against these themes and timescales for completion.
Two new working groups have also been launched to focus specifically on variable recurring payments (the Variable Recurring Payments (Non-Sweeping) Working Group (the VRP)) and the future open banking entity (the Design of the Future Entity Working Group (DFE)).
Expanding the use of VRP is intended to allow consumers and businesses to make a wider range of payments more efficiently, including utilities, charity donations etc. where amounts paid can vary each time. At present, VRP use is limited to ‘sweeping’ - i.e. payments made by individuals when moving money between their own accounts. The VRP working group will develop a blueprint for the phased roll-out of non-sweeping VRP by the end of September 2023.
It is currently intended for the DFE to transition to a future open banking entity. The DFE working group will therefore consider the design of the future open banking entity, including its role, structure, and funding. It will also set out proposals around how the future entity can be implemented. The JROC plans to publish its views on the proposals made by the working groups in an update towards the end of 2023.
Today, over 7 million consumers and businesses use innovative open banking enabled products and services to manage their money and make payments, with open banking payments more than doubling in 2022. However, clear regulatory direction and a structured approach will be crucial to ensure the continued success story of open banking in the UK.
'Now that we have a roadmap in place to deliver on the next phase of open banking, it’s vital that we work collaboratively and at pace to progress the key priorities we identified. 'These dedicated workstreams, including the two new working groups on VRP and future entity, will make sure the correct foundations are in place for open banking to grow in a safe and sustainable way.' - PSR’s Managing Director, Chris Hemsley, and FCA’s Executive Director, Consumers and Competition, Sheldon Mills.