CMA pledges to implement open banking recommendations
The Competition and Markets Authority (CMA) has vowed to implement all open banking recommendations following an independent review.
Last year, the CMA commissioned non-executive director Kirstin Baker to lead a review into the specific lessons for the CMA in its approach to designing, implementing and monitoring remedies in future market investigations.
The results showed that the technical solutions to achieve the open banking remedy have been and continue to be “successfully implemented”.
But Baker also revealed that the CMA did not expect the undertaking to be as large and complex as it is and failed to foresee or manage some of the risks in the delivery of the project, particularly on governance at the Open Banking Implementation Entity (OBIE) and relationships with key stakeholders.
The review made seven recommendations to the CMA, which has pledged to implement them.
Baker called for the CMA to set out processes and governance for its board and executive oversight of the delivery and implementation of remedies and build more effective board oversight and risk management processes.
The CMA said it will publish a further update next year on its progress in implementing this work programme.
A number of peer-to-peer lending platforms use open banking, such as ArchOver, Rebuildingsociety, Kuflink and most recently Plend.
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“The open banking remedies are some of the most complex ever implemented by the CMA and have been important in opening up competition in retail banking and supporting the growth of UK fintech,” said Kirstin Baker, who led the Lessons Learned review.
“Many stakeholders I spoke to for this review underlined that the CMA should continue to be bold and innovative in using its market powers to benefit consumers.
“However, the board recognised that there were lessons for the CMA to learn from the governance failings at the OBIE identified by Alison White and my review has found that the CMA did not match the ambition of the remedy with an appropriate level of oversight or strategic risk management.
“The CMA seeks to be a learning organisation and I am pleased that staff at all levels engaged constructively with this review and that changes have already been made or are in progress to address the issues identified.”
Read more: Open banking tipped to evolve into open finance
Read more: OBIE publishes new standard for 90-day open banking rule change
“Since joining the CMA earlier this year, I have become even more convinced of the potential of market investigations to deliver significant positive impacts for consumers,” said David Stewart, executive director of markets and mergers at the CMA.
“But however good our analysis and proposed remedies, we will only achieve better outcomes for consumers, businesses and the economy if we follow through on our decisions with effective implementation, monitoring and enforcement.
“That is why I am so grateful to Kirstin Baker for her review. It will help shape our work programme on remedies and I am determined that we will deliver on it and report on it publicly.”
This review follows the Alison White report, which found allegations of bullying within the OBIE and led to a change in chair and improvement in governance at the body.