Latest updated 1 November 2023
The future of open banking and the Joint Regulatory Oversight Committee
Following the Joint Regulatory Oversight Committee’s (JROC) publication of its recommendations for the next phase of open banking in the UK in April 2023, we have continued to work at pace to implement those recommendations.
In June 2023, the Joint Regulatory Oversight Committee confirmed an ambitious programme of work to take forward the actions identified as key to achieving JROC’s vision of realising the full potential of open banking. This includes the creation of two regulator-led working groups. The groups will develop the framework for the expansion of variable recurring payments and the design of the future open banking entity. The terms of reference for each one are:
JROC has also published a joint paper on principles for commercial frameworks for premium APIs. This paper aims to promote additional services, using non-sweeping variable recurring payments as a pilot. The principles set out will ensure that charges and fees paid by third party providers to banks and other payment providers are fair and proportionate.
The recommendations published in April focus on actions identified as key to achieving JROC's vision, including transitioning open banking to a future entity. It provides the committee’s thinking on the role and design of the future entity and the next steps to refine these views.
It also includes a phased roadmap, comprising of five themes of activities to be delivered over the next two years and an update on the government's thinking on a long-term regulatory framework once the foundations for the next phase of open banking are in place. The committee will publish a progress update in Q4 2023.
The committee’s recommendations build on a joint statement, published by the FCA, PSR, CMA and HM Treasury in December 2022, outlining its vision and early thinking on the design of the future entity.
The Joint Regulatory Oversight Committee
In March 2022, the FCA, PSR, CMA and HM Treasury published a joint statement on the future of open banking, announcing the creation of a Joint Regulatory Oversight Committee. The committee, co-chaired by the FCA’s Executive Director, Consumers and Competition, Sheldon Mills, and PSR’s Managing Director, Chris Hemsley, held its first meeting on 12 May 2022 where the Terms of Reference for the committee were agreed. In future, we will publish summary minutes of the committee meetings as referred to in the Terms of Reference.
The role of the committee is to:
- oversee the planning and preparation for the future open banking entity (future entity)
- oversee the transition to the future framework,
- consider the vision and strategic roadmap for further developing open banking and
- oversee and, where applicable, monitor the future entity, once set up, until a permanent regulatory framework is in place.
Set up of the VRP working group and future entity working group
In June 2023, JROC set up dedicated workstreams to action the six key themes and priorities as outlined in its recommendations.
This includes launching two new working groups on variable recurring payments (VRP) and future open banking entity. The VRP working group, chaired by the PSR, will develop a blueprint for the phased roll-out of non-sweeping VRP by the end of September 2023. The future entity working group, chaired by the FCA, will 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 working group will report to the JROC by the end of September 2023 and the JROC will publish its views in an update towards the end of 2023.
Minutes of the working groups will be published.
Set up of the strategic working group (SWG)
The committee members believe there is potential to build on the progress to date of open banking, to drive further benefits for consumers and businesses, and maintain the UK’s position as a leader in innovation. The committee sees opportunities in unlocking the potential of open banking payments, enabling end-users to share data, managing access, and developing further data-sharing propositions. This includes greater consumer protection and to ensure open banking remains interoperable with any possible future open finance initiatives.
The committee is keen to work closely with the industry and other key stakeholders.
As part of this, the strategic working group (SWG), a non-decision-making consultative forum, was convened in Q3 2022 to collate stakeholders’ views and input on ways to further develop open banking, to help inform the recommendations of the committee. The SWG was independently chaired by Bryan Zhang. Its final report can be found here.
Our letter to Open Banking Implementation Entity (OBIE) and OBIE's response provide further detail on the objectives and expected deliverables of the SWG. The news update provides further information on the appointment and role of the SWG chair, as well as the supporting role the committee’s co-chairs asked the OBIE to play.
Further detail on the SWG, including its final report, terms of reference, and other updates, are available on the SWG website.
Progress on OBL-led Working Groups
OBL has published two data collection frameworks on API availability and fraud respectively. This constitutes the completion of two actions set out in the JROC report under the themes of ‘Levelling up availability and performance’ and ‘Mitigating the risks of financial crime’, which OBL have been leading and coordinating, under JROC’s oversight.
Committee meetings – discussions and actions
3 October 2023
The Committee discussed updates and progress of the variable recurring payments (VRP) and future entity working groups.
Representatives from Open Banking Limited (OBL) and Pay.UK also attended the meeting and provided updates on their respective workstreams. The Committee discussed and approved the data collection frameworks of workstream 1 ‘Levelling up availability and performance’ and workstream 2 ‘Mitigating the risks of financial crime’ led by OBL, as well as the extension of the deadline on data collection under workstream 2A ‘Financial Crime Data’ to January 2024.
Members also discussed the role of the future open banking entity and its core functions, taking into account JROC’s three priorities and objectives of promoting innovation and competition and future scalability.
14 August 2023
The Committee discussed updates and progress of the variable recurring payments (VRP) and future entity working groups. The Committee also considered the revised timelines and approved the proposed extension to Q4 2023 for both working groups.
Representatives from Open Banking Limited (OBL) and Pay.UK attended the meeting and provided updates on their respective workstreams. The Committee reviewed and discussed the draft data collection frameworks of workstream 1 and workstream 2 led by OBL, including recommendations, ecosystem engagement, and participation.
21 July 2023
The Committee discussed updates and progress of the VRP and future entity working groups.
Representatives from Open Banking Limited (OBL) and Pay.UK also attended the meeting and provided updates on their respective workstreams. OBL is working closely with ecosystem participants to finalise the development of the data collection frameworks to meet JROC deliverables and expectations.
30 June 2023
The Chairs of the VRP and future entity working groups provided progress updates to JROC. Both working groups were convened in June 2023 and have made good progress in evaluating the core requirements needed to deliver VRPs and a future entity.
In addition to JROC committee members, the meeting was attended by representatives from Open Banking Limited (OBL) and Pay.UK as observers. OBL presented an update on the workstreams they lead for JROC deliverables.
The Committee agreed to a change request for Pay.UK to take sole ownership of the following JROC action: “Implement the use of open banking-based data sharing in Faster Payments to reduce fraud” under the theme “Mitigating the risks of financial crime”. This will be delivered by Pay.UK by Q4 2023. Pay.UK will provide a regular update on this action to JROC.
30 May 2023
The committee discussed the governance processes and progress update for the delivery of recommendations and actions set out in the April publication. The committee agreed to set up two working groups, which will be chaired by the FCA and the PSR respectively, to advance the work on future entity design and develop a blueprint for non-sweeping variable recurring payments. Terms of reference of these working groups have been published.
Committee members also discussed high-level principles and regulatory expectations around premium APIs pricing ahead of the JROC co-chair planned publication by the end of June.
In addition, the committee agreed that delivery partners (the Open Banking Implementation Entity and Pay.UK) should be invited to JROC meetings as observers where and as appropriate.
28 April 2023
The committee considered the overall project plan in relation to the delivery of the 29 activities outlined in the JROC report with a focus on 2023. The committee will monitor the progress of these deliverables and make decisions where needed.
The committee discussed in more detail the most pressing deliverables, including the creation of a working group for non-sweeping variable recurring payments and the governance of non-CMA Order activities.
21 March 2023
The committee approved the structure of the upcoming publication and discussed recommendations in relation to a future roadmap and the design of a future entity. The committee agreed that the publication should set out clearly the committee’s objectives, priorities, intended outcomes and deliverables, taking account of the feedback provided through the SWG process, engagement sessions with stakeholders and the Trustee’s End of Implementation Roadmap Report.
The committee agreed on timelines for publication and further engagement plans following publication.
28 February 2023
The main agenda item discussed was on the upcoming JROC publication. The committee agreed that the publication will set out its vision for the future of open banking, including the design and delivery of the future entity, the key development themes for a future roadmap, the activities to be considered in a phased manner and critical next steps.
The committee also agreed that it will continue, in parallel, to develop a strategy for open banking’s interim phase.
In addition, members agreed on a stakeholder engagement plan.
HM Treasury provided an update on its thinking in relation to the long-term regulatory framework for open banking.
20 December 2022
Bryan Zhang presented findings from the draft final report to the committee. This follows two rounds of sprints and 189 written submissions. The final report outlines a wide range of stakeholder views on the vision for open banking and the role and potential models for the future entity. It sets out views on short and long-term priorities for developing open banking and who should take these forward, including where regulatory support may be required.
Members thanked Bryan and the SWG for their analysis. The committee will review the final report. They suggested further discussions should take place in the new year.
The CMA updated on its transition work and the now published roadmap completion decision.
Following the joint statement of 16 December, members discussed feedback and immediate next steps, including plans to engage with stakeholders ahead of publishing recommendations at the end of Q1 2023.
30 November 2022
The CMA provided an update on OBIE’s transition work, including identification of the activities required to service the continuing obligations under the Order following completion of the Roadmap.
Members discussed the design options for the future entity in relation to its structure, funding and governance arrangements in the interim regulatory state, with detailed analysis to continue into Q1 2023. The committee also noted the importance of developing a route to putting a long-term regulatory framework in place.
Members agreed that the committee should publish an update on its activities, including emerging thinking on the vision, the role of the future entity, the key issues that will be prioritised by the committee and next steps.
27 October 2022
Bryan Zhang, the independent SWG chair, presented the interim report findings to the committee. The report provided a broad base of evidence and opinions from across the open banking ecosystem on the three key priorities identified by the committee. Members thanked Bryan and the SWG for the extensive analysis, which effectively sets out stakeholder views on current gaps, potential solutions and desirable capabilities. The committee agreed on an overarching framework for the second phase of sprints, which will focus on the short and longer-term solutions to take forward key activities, the prioritisation of these, the empirical evidence and further cost and benefit information where needed. The next set of sprints will also consider the role of the future entity and other actors in delivering those changes, and timeline for implementation. Findings from the second phase of sprints will inform the committee as it develops a roadmap to deliver the vision for the future of open banking.
The CMA also updated on its transition work and recent engagement with the industry. Members agreed on the need for alignment and for the committee to progress at pace and communicate with stakeholders the direction of travel under a joint vision for the future of open banking.
6 October 2022
Bryan Zhang, the independent SWG chair, updated the committee on the SWG’s progress and plan. He confirmed that the SWG would be sharing an interim report which would address the questions set by the committee under each of the three agreed key priorities.
The CMA also updated on its transition work and agreed to share OBIE’s upcoming transition plan with other members.
Members acknowledged interdependencies between the different activities undertaken by the CMA under the transition plan, the long-term regulatory framework driven by the HM Treasury and activities led by the committee which include considering the vision and priorities for open banking and developing the design of the future entity, and how it sits within the wider payments and data sharing ecosystem. Members agreed on the need for continuing to progress in a coordinated manner and at pace.
Members also started to discuss options for the future entity, in particular in relation to its structure, governance and funding arrangements. Members agreed that the design would be dependent on the agreed vision for the future of open banking and the outcome of the CMA transition plan.
22 July 2022
Members confirmed the appointment of Bryan Zhang as independent chair of the SWG, following a competitive appointment process, in line with selection criteria, conducted by the co-chairs of the committee. The chair will be fully accountable to the committee, with the SWG’s Terms of Reference to be approved and published by the committee.
As part of transition planning, members agreed there were significant links between the transition work being undertaken by the CMA and the OBIE and that of the committee and that there should be alignment where possible.
Members discussed the vision for Open Banking, including the high-level outcomes, objectives, and success measures, and the three detailed priority areas flowing from those. The committee has agreed to finalise problem statements for each of the three priority areas with a view to share with the SWG and collate views from stakeholders.
14 June 2022
Members discussed the set-up and funding of a non-decision-making SWG, which will facilitate the committee’s engagement with industry and broader stakeholders. The SWG will act as a consultative forum to collate stakeholder views to bring to the committee for consideration. The Committee agreed the group should be established at pace. They also agreed the committee may, in addition, reach out to other stakeholders as and where needed, although this would be separate to the SWG.
Members agreed that the SWG will be independently chaired and considered potential candidates based on a set of criteria, including professional experience, knowledge of open banking, chairing skills, independence and availability, and agreed to reach out to them.
12 May 2022
Members emphasised their desire to support further developments in open banking and to do so at pace. Members also agreed the importance of closely engaging with the industry and broader stakeholders. To that end, the committee agreed to stand up a stakeholder group (the strategic working group). Members additionally agreed for the Committee’s Terms of Reference to be signed off via written procedure and published, as well as for communication on the strategic working group and summary minutes of committee meetings to be published.