UK Finance has set out plans for a new company to replace the Open Banking Implementation Entity (OBIE) as it hopes to expand the use of the technology.
Open Banking was launched in January 2018 to great fanfare, mandating the UK’s largest banks to share anonymised customer data with approved third parties, with the aim of increasing competition and innovation in financial services.
Lenders set up the OBIE, which has supported the rollout of the technology by helping to create application programming interfaces. This means that third parties such as peer-to-peer lenders can access the banks’ data when making credit decisions.
The next step is to make the adoption of open banking a permanent feature.
Read more: Open banking reaches 3-year anniversary
Trade body UK Finance has said it plans to create a not-for-profit service company that will replace the OBIE and develop the open banking market.
It will manage a centralised open banking directory and create, maintain and improve technical standards.
The service company will have a board comprised of an independent chair and a mix of independent, consumer and industry representatives.
An advisory committee made up of member representatives and stakeholders, such as end-user representatives, industry bodies and regulators, will advise the board.
UK Finance’s proposals still need to be considered by the Competition and Markets Authority.
“Open Banking is a prime example of the UK’s position as a global leader on financial innovation that benefits and protects the consumer,” Jana Mackintosh, managing director of Payments at UK Finance, said.
“We know that it is vital that the industry works together to realise the opportunities for even greater innovation of a new generation of banking-related products and services. Our proposed model for the future service company will help facilitate these exciting developments for years to come.”
A number of P2P lenders have tapped into the opportunities presented by open banking.
ArchOver announced that it had partnered with analytics firm AccountScore to provide open banking data for use in its credit and monitoring teams, while Lending Works has partnered with Credit Kudos for credit applications.