In the UK, local financial regulators have unveiled plans for the future development of open banking.
The Joint Regulatory Oversight Committee (JROC), co-chaired by the FCA and the Payment Systems Regulator (PSR), say that their proposed measures offer a new horizon of opportunities for products and services. Regulators note that their proposals are aimed at ensuring that consumers and businesses can exchange data and carry out transactions in convenient and highly efficient ways.
JROC also proposes the concept of a new structure that will replace the organization for the implementation of Open Banking. The Committee has developed a roadmap and principles that will form the basis of a long-term regulatory framework. The government plans to consolidate this base at the legislative level.
The future organization, according to the JROC concept, will follow high standards of corporate governance, and have a broad base of members, supported by large-scale and proportional financing mechanisms. Also, this structure will ensure that the needs of end users are met.
It is also known that regulators intend to cooperate with representatives of the open banking sector over the next few months to form the best management option and the most effective principles for financing the future organization. A detailed plan for the creation of the new structure will be made public in the fourth quarter of this year. So far, regulators are limited to general statements of a generalized nature about the desire to respect the interests of consumers and the effectiveness of financial transactions.
The roadmap for the development of open banking provides for focusing on five main topics and priorities over the next two years. One of the goals is to strive for a high level of availability and performance. Attention is also drawn to the importance of reducing the risks of financial crimes. Other priorities are consumer protection, improvement of information flows, and promotion of additional services using unregulated periodic payments (VRP) as a pilot project.
Todd Clyde, executive director of Token, said that the unequivocally positive signal is that regulators are aware of the potential of unregulated periodic payments. He also noted that payments in this category contribute to the expanded use of open banking opportunities.
JROC states that the open banking implementation unit will take measures to improve the collection of data on fraudulent activity and API availability with immediate effect.
The co-chairs of the committee, PSR Managing Director Chris Hemsley and FCA Executive Director for Consumer and Competition Sheldon Mills say that only with cooperation will it be possible to develop open banking in such a way that a continuous process of innovation and competition is realized for the benefit of consumers, business and the economy as a whole.
As we have reported earlier, Central Bank of Nigeria Releases Open Banking Guidelines.