More needs to be done to deliver the full benefits of open banking technology, which helps to improve customers’ access to financial services, according to regulators.
The Joint Regulatory Oversight Committee (JROC) has published its vision for open banking, which can improve people’s financial health by helping them to make more informed decisions and improving their access to products and services.
Open banking enables people and businesses to provide third-party providers with secure access to their payments account.
Based on the access to data that is shared under the customer’s explicit consent, these third parties can then provide customers with services and products that could help save them time or money.
Sharing their data securely could, for example, help them to find suitable products that could help them keep on top of their bills, build their savings or manage debt.
The committee, which is made up of the Financial Conduct Authority (FCA) and the Payment Systems Regulator (PSR) as co-chairs and the Treasury and the Competition and Markets Authority (CMA) as members, was established in March 2022 to design and oversee the next phase for open banking.
It published recommendations which said: “While significant progress has been made, more needs to be done to deliver the full benefits of open banking within retail banking markets, and beyond, and maintain its international leadership.”
More than seven million people and businesses across the UK currently use open banking-enabled products and services to manage their money and to make payments, the committee said.
The JROC said it is committed to enabling open banking to thrive.
It said: “Success will be measured through greater innovation, lower prices or costs and improved quality of services through competitive pressure being exerted across the sector.
“We will also measure success through the growth of the ecosystem (including the number of products and services offered), the increased use of and reliance on open banking by consumers and businesses, the significant increase of total number of active users, and the overall growing investment in open banking.
“It will also be measured in terms of a low number of incidents and issues, the way in which those are resolved, and the scale of any resulting consumer loss.”
Open Banking Limited (OBL) was set up by the CMA in 2016 to deliver open banking.
Marion King, OBL chair and trustee, said: “Today’s announcement by the Joint Regulatory Oversight Committee secures the future for our thriving open banking ecosystem in the UK.”