A group of top fintech firms including Monzo and Wise have slammed UK regulators for a lack of progress on open banking today, claiming the “integrity and potential” of the regime in the UK is at risk.
In a letter to the Financial Conduct Authority seen by City A.M., 17 top firms and industry body Coadec said that while the UK’s progress on open banking was once “the envy of the the world”, its future was now “uncertain” due to a lack of direction from the body in charge of its roll-out, the Joint Regulation Oversight Committee (JROC).
Open banking was introduced by the Competition and Markets Authority in 2018 to free up data sharing between traditional big banks and smaller startups, with the aim of boosting competition and innovations in financial services.
The open banking regime moved into a new governance structure earlier this year under the JROC. The body published an update on open banking progress last week in which they outlined a vision for the regime and the design of an entity to oversee its roll-out.
However, in the letter published today, Coadec and the group of firms criticised a lack of clarity in last week’s update and called on regulators to publish “clear directions and timelines for the continued enforcement of Open Banking”.
“The update on Friday 16th December 2022 did little to assuage our concerns that the integrity and potential of open banking is at risk,” the firms wrote.
“We call for the JROC to publish clear directions and timelines for the continued enforcement of Open Banking in 2023 and beyond as a matter of urgency,” they added.
Wise and Monzo, as well as Crezco, small business API company Codat, and data and payments provider Moneyhub, are among the firms to throw their weight behind the calls.
The criticism from the group comes after a delay to a report collating the industry’s feedback on the next stage of open banking, as well as uncertainty over the entity that will oversee the process. The previous body, the OBIE, is due to be wound down and replaced.
Senior JROC officials hit back at the criticism however and told City A.M. they were working to put “open banking on a sustainable footing for the future.”
“The UK has led the way on Open Banking and has provided opportunities for all firms, including the members of COADEC, to bring a range of products and services to UK consumers,” the co-chairs of JROC, Sheldon Mills of the FCA, and Chris Hemsley of the Payment Systems Regulator, told City A.M. in a joint statement.
“The FCA and the PSR are working closely with HMT and the CMA to ensure that Open Banking continues its success and can scale to future uses.”
They added they had recently provided a progress update and would be putting further plans in place early next year ahead of a “more detailed recommendations by the end of March”.
