Innovate Finance has called for a sustainable and independent system for open banking in the UK that promotes competition, transparency and innovation.
This is in response to the Competition and Markets Authority’s (CMA) consultation on the future of open banking reforms. Last week a group of 19 fintech executives complained to the CMA that its consultation gives big lenders the power of decision making.
Fintech bosses raised concerns over the CMA’s plans to use proposals submitted by UK Finance as the basis for its consultation.
Adam Jackson, director of policy at Innovate Finance, said the industry trade body has responded to the consultation and is calling for a system with robust independence, including from the largest banks.
“The introduction of open banking has supported innovation and the development of fintech in the UK,” Jackson said.
“Innovate Finance has responded to the CMA’s recent consultation on what long-term arrangements should now be put in place for the ongoing oversight and governance of open banking.
“We have called for a sustainable and independent system that promotes competition, transparency and innovation.
“In particular we have advocated robust independence, including from the largest banks, and a model that can be extended over time to other open finance and smart data applications.
“We are now awaiting the CMA’s views on this and will look carefully and constructively at what they conclude.”
Todd Clyde, chief executive of open banking payments platform Token, said he has concerns for the future of open banking and urged the CMA to wait for the FCA and government to set out the legislative frameworks for open finance.
“I can understand the reasoning behind the CMA’s recent review, but we do, along with our peers across the industry, now have major concerns about the future direction of the stewardship of open banking,” he said.
“While evolution of the Open Banking Implementation Entity’s role is inevitable, we have to get this right – our national reputation and ambitions for fintech are at stake.
“Open banking, at its heart, is a response to the broken trust in banks that can be traced back to the financial crisis; the same banks have dragged their heels when it comes to this new mandate, and so I simply see no proof that they can be trusted to steward a growing fintech ecosystem.
“The key elements of competition, innovation, and favourable consumer outcomes are all at risk of being stifled if banks have full control of the next stage of open banking’s development.”