MG’s views on the Joint statement from HM Treasury, CMA, FCA, & PSR on the future of Open Banking

A joint statement was released on March 25, 2022, by Payment Systems Regulator (PSR), Financial Conduct Authority (FCA), CMA, and HM Treasury, announcing their collaboration on the future vision & governance of open banking and the formation of a Joint Regulatory Oversight Committee (the Committee). Further, on December 16, 2022, the committee discussed the update on the progress, the vision and innovative ideas for how the future entity should function.

This is expected to bring major changes and reforms in Open Banking, enhancing development across various spheres. Open banking has increased the UK’s international competitiveness and leadership and has also benefitted customers, businesses, and the broader economy, promoting economic growth.

Let us elucidate on what would be the impact of these statements, and how Tavas, a new-gen, platform is fuelling the development of open banking, and leveraging the future of the FinTech Industry.

The impact of the Joint Statement

Three priorities identified are to unlock the potential of Open Banking payments to support competition and innovation, and to adopt a scalable model for future data-sharing propositions. Further, the focus is also on establishing a sustainable foundation for the ongoing development of the Open Banking ecosystem.

The Strategic Working Group (SWG), convened by the Joint Regulatory Oversight Committee (JROC) and independently chaired by Bryan Zhang, is providing a comprehensive analysis that reflects the variety of stakeholder perspectives on Open Banking’s current gaps, potential short- and long-term solutions, and the structures required to further develop Open Banking and define a future roadmap. The final report of the SWG, which will be given to the Joint Regulatory Oversight Committee by January 2023, will be a crucial factor in JROC’s deliberations.

In the interim, we anticipate the future entity to begin delivering priority non-Order activities, with cooperation from regulators, as necessary. The transitional state will terminate when a permanent regulatory framework is in place. The framework will be supported by all applicable legislation.

The blueprint of the future entity includes

The Joint Regulatory Oversight Committee has a key vision for the future:

      • Empower Open Banking products and services. Drive competition in financial services that benefit both consumers and businesses 
      • Strong technical infrastructure and services enhancing new standards 
      • Ensuring cohesive collaboration with partners like Pay.UK concerning Faster Payments Scheme rules.  

There are three essential components that the work addresses

  • To enable Open Banking to thrive, a long-term regulatory framework needs to be established and will include the relevant regulator
    with powers of review, variation, or withdrawal (subject to CMA judgement).
  • The CMA Order is in effect before permanent regulations are set up an interim state will exist.
  • To ensure usability across all users of services and capabilities, it is important that financing for this future entity comprises broad-based equitable funding which efficiently distributes costs proportionally
  • In the interim state, various principles implied on non-order activities, encompassing new activities, services or infrastructure would be discussed.
  • The purpose of the entity, including playing a significant role in the development and growth of Open Banking, should be reflected in its governance arrangements.
  • Any fees/liability arrangements should also take into consideration these same factors.

Interaction with further open banking operations

Joint Regulatory Oversight Committee’s work and transition planning to assess any legislation required to underpin the long-term regulatory framework for Open Banking will ensure the objectives are met.  

Next actions

  • CMA will announce the completion of the present road map.
  • In the first quarter of 2023, the Committee will make public its suggestions

About the design of the new institution, both during the interim stage and once a long-term regulatory framework is in place, as well as its vision for Open Banking.  

The Committee will continue to coordinate to ensure all activities align to achieve the vision set. 

MG's View on the Joint statement

The joint statement, focussing on emerging thinking, which encompasses the design of a future Open Banking entity has been revealed lately. This joint statement has added additional focus to ensure that the operation reaches more people effectively, along with a technical roadmap envisioning a broader schema of design, implementation, effectiveness, and operations of open banking. The SWG’s extensive analysis would reflect the range of stakeholder views it has gathered during a series of “strategy sprints” in recent months. Also, a further statement is yet to be released in the first quarter of 2023. This will open the views, and recommendations with futuristic insights.  

In the series of Sprint Strategy, the committee consists of a range of industry representatives, subject matter experts’ consumers, businesspeople, and other prominent stakeholders who have given their views addressing the current gaps, short-and long-term solutions, along with the structures required to further develop Open Banking and define a future roadmap. According to the latest announcement, two expert panels from the SWG’s team will be set up to lead the payments strategy sprint and the data strategy sprint. The duration of each sprint would be for three weeks, starting with a one-hour “kick-off” session and followed by a two-hour sprint discussion agenda. We expect that JROC would prioritise existing issues rather than getting narrow with topics regarding ESG amongst other considerations during this period.  

The advent of this joint statement is to promote the prominence of quick, efficient, and convenient data transmission methods to the third-party banking service provider, enhancing greater competition and innovation that would benefit consumers, businesses, and the wider economy. As a result, a boom in boosting the economy of the UK and fostering international leadership in this field can be achieved swiftly. This fuels the unlocking of Open Banking payments to enhance a plethora of newer options for payments, and tailored services that would reinvent a plethora of possibilities, and bring more prospects into open banking that would help invoke newer opportunities.  

In addition to unlocking Open Banking payments, HM Treasury, the FCA, PSR, and CMA are focused on “Adopting a model that is scalable for future data sharing propositions”, and “Establishing a sustainable footing for the ongoing development of the Open Banking ecosystem.” 

Increased impetus toward open banking – What Financial Institutions should do?

There are almost five million active users in UK. The trajectory had gained momentum in the last five years. According to the Statista Research Department, Europe has almost 12.2 million, open banking users, and is expected to reach 63.8 million by 2024. As of 2020, 24.7 million individuals worldwide used open banking services, a number that is forecast to reach 132.2 million by 2024. It is important to note that, the growth reached a great momentum between 2020 to 2024, at an almost 50% increase.  

When much of the emphasis is on the security of all the transactions, where most of the data are exposed to several vulnerabilities, it is highly mandatory to enable comprehensive protection. Various financial regulatory boards and organisations are constantly working towards bringing holistic effectiveness to increase operability, facilitate ease of transactions, offer seamless operations, and strengthen the open-banking system. 

The backbone of the Open Banking system lies in the modern platforms that offer a plethora of options including robust dataflow, advanced API, and adherence to strict compliance and regulations. With advanced options to choose between cloud-based architecture or an on-premises, it opens newer choices for the clients to choose efficiency and cost-effectiveness compared to the traditional methods of banking.  

How Tavas will help achieve the vision?

As a comprehensive Open Banking product suite, TAVAS focuses on creating a consumer-centric digital payment transformation, encompassing advanced features with great security. Adhering to strict compliances, and regulations to achieve interoperability and stay in control of the endlessly changing payments ecosystem. TAVAS supports a robust data flow serving the Open Banking security conformance and accelerating an array of features for secure deployment of open APIs compliant with OBIE API Specifications. Along with that, it has an integrated developer portal and Open API sandbox that helps third-party providers to build and develop Open Banking APIs. Feature-rich platform with vital Data-quality controls and integrity checks offers resilience and complete end-to-end open banking solutions

As being highly inter-operable, and efficient to handle massive accounts of transactions along with a high volume of payment requests ensuring the integrity and validity of every transaction has made TAVAS, the most reliable solution.

Encompassing all the features required to build a comprehensive platform, Tavas has become a boon for banks, to expand and enhance customer satisfaction, and bring futuristic advancement proactively. To partner with us, call us at +44 (0)204 574 2433 or mail us at Our executives will stay connected with you to understand your requirements.

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