UK Regulators Set Up New Working Groups to Expand Open Banking

Tuesday, 06/06/2023 | 15:57 GMT by Jared Kirui
  • JROC seeks to expand the range of payment services in the UK's open banking industry.
  • The new working groups would also oversee the mitigation of the risks of financial crimes.
FCA, usgfx

The Joint Regulatory Oversight Committee (JROC), which is co-chaired by the Financial Conduct Authority (FCA) and the Payments Systems Regulator (PSR), has set up 'dedicated workstreams' for the implementation of open banking in the United Kingdom.

Open banking provides a way in which consumers and businesses can securely share their payment accounts' data with regulated third-party providers (TPPs) to receive customized services, such as lending and payments – an important aspect in the UK's fintech ecosystem.

JROC’s Open Banking Working Groups

In support of the next phase of the open banking initiative, which started in 2018, JROC has created two new working groups to focus on variable recurring payment (VRP) and a future open banking entity, among the other themes of the initiative. VRP is a type of payment that enables consumers to permit a third-party provider to initiate payments from their bank account on a recurring basis, with the amount charged varying from time to time.

Additionally, the committee has appointed Open Banking Limited (OBL) to lead and manage workstreams on the themes of its recommendations for the next phase of open banking in the UK.

In April, JROC identified five themes for open banking - levelling up availability and performance, mitigating the risks of financial crime, ensuring effective consumer protection, improving information flows to TPPs and end users, and promoting additional services using non-sweeping variable recurring payments (VRP) pilot - to be implemented in the next two years.

One of the working groups, the VRP Working Group, aims to expand the use of VRPs beyond moving funds between accounts to include a broader range of payment services. The working group is expected to release a roadmap for the rollout of the non-sweeping VRP by the close of September 2023, JROC said.

Future Entity Working Group

On the other hand, Future Entity Working Group would oversee the transition from Open Banking Implementation Entity (OBIE) to an open banking entity to be set in the future. The working group, which will consider, among other things, the plan's design, will also report to JROC by the end of September.

"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," the Co-Chairs of the JROC, PSR's Managing Director, Chris Hemsley, and FCA's Executive Director of Consumer and Competition, Sheldon Mills, said.

As of April, JROC reported that more than 7 million consumers and businesses benefited from open banking, of which 750,000 were small and medium-sized enterprises. In addition, it said open banking payments rose to 68 million in 2022 from 25 million in 2021.

Citi chooses NetDania; FMA warns against imposter; read today's news nuggets.

The Joint Regulatory Oversight Committee (JROC), which is co-chaired by the Financial Conduct Authority (FCA) and the Payments Systems Regulator (PSR), has set up 'dedicated workstreams' for the implementation of open banking in the United Kingdom.

Open banking provides a way in which consumers and businesses can securely share their payment accounts' data with regulated third-party providers (TPPs) to receive customized services, such as lending and payments – an important aspect in the UK's fintech ecosystem.

JROC’s Open Banking Working Groups

In support of the next phase of the open banking initiative, which started in 2018, JROC has created two new working groups to focus on variable recurring payment (VRP) and a future open banking entity, among the other themes of the initiative. VRP is a type of payment that enables consumers to permit a third-party provider to initiate payments from their bank account on a recurring basis, with the amount charged varying from time to time.

Additionally, the committee has appointed Open Banking Limited (OBL) to lead and manage workstreams on the themes of its recommendations for the next phase of open banking in the UK.

In April, JROC identified five themes for open banking - levelling up availability and performance, mitigating the risks of financial crime, ensuring effective consumer protection, improving information flows to TPPs and end users, and promoting additional services using non-sweeping variable recurring payments (VRP) pilot - to be implemented in the next two years.

One of the working groups, the VRP Working Group, aims to expand the use of VRPs beyond moving funds between accounts to include a broader range of payment services. The working group is expected to release a roadmap for the rollout of the non-sweeping VRP by the close of September 2023, JROC said.

Future Entity Working Group

On the other hand, Future Entity Working Group would oversee the transition from Open Banking Implementation Entity (OBIE) to an open banking entity to be set in the future. The working group, which will consider, among other things, the plan's design, will also report to JROC by the end of September.

"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," the Co-Chairs of the JROC, PSR's Managing Director, Chris Hemsley, and FCA's Executive Director of Consumer and Competition, Sheldon Mills, said.

As of April, JROC reported that more than 7 million consumers and businesses benefited from open banking, of which 750,000 were small and medium-sized enterprises. In addition, it said open banking payments rose to 68 million in 2022 from 25 million in 2021.

Citi chooses NetDania; FMA warns against imposter; read today's news nuggets.

About the Author: Jared Kirui
Jared Kirui
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About the Author: Jared Kirui
Jared is an experienced financial journalist passionate about all things forex and CFDs.
  • 1309 Articles
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