The Financial Conduct Authority will consult with firms and other stakeholders over the next six months to decide on “the best way forward” to set up an open banking standards body.
The City regulator says the body, currently called the Future Entity, will support the rollout of variable recurring payments for some types of household bills “later this year”.
The watchdog says it has made “significant progress” in talks with the industry over the last six months on the tasks of the new body.
It adds: “We will be engaging with industry and other stakeholders to decide upon the best way forward to standing up the Future Entity, helping to create a more thriving and innovative open banking industry.”
The FCA has called opening banking, first introduced in 2018, “a UK success story,” which has over 11.7 million active users who make 22.1 million payments a month.
The regulator adds: “The open banking standards provided by the Future Entity are expected to be used by commercial open banking schemes promoting innovation in the sector.
“The Future Entity is expected to monitor the quality and consistency of technologies used in open banking. This should help inform our supervision of firms.”
The new body’s responsibilities will include:
- Setting common standards that will provide a minimum level of service and interoperability across open banking services
- Monitoring API performance
- Ensuring adherence to relevant standards — including providing information to the FCA
- Providing directory and certification services
- Working with multilateral agreement owners and operators to develop standards that enable commercial schemes
FCA director of payments and digital finance Matthew Long says: “This is the next step in realising our vision of a more innovative, safe and competitive payments sector, which embraces technological change to better serve people and businesses.
“We expect the Future Entity to play a central role in the next phase of open banking, setting and monitoring the standards that underpin the industry.
“However, we can’t realise this future alone. Our engagement and support from industry continues to play a vital role in the future of open banking, as we build on the momentum we’ve seen in the past six months.”
