On 17 April 2023, the Joint Regulatory Oversight Committee (JROC), co-chaired by the FCA and the Payment Systems Regulator (PSR), published a report setting out its recommendations for the next phase of open banking in the UK.

Open banking is a secure way for consumers and businesses to give regulated third-party providers (TPPs) access to their payment account data and to initiate payments. The JROC, comprising the FCA and PSR as co-chairs and HM 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.

The report sets out the JROC’s views and recommendations, and the joint actions required to successfully transition to the next phase of open banking and maintain the UK’s international leadership.

The JROC’s recommendations contain a roadmap of priorities for the next two years, covering five key themes:

  • Levelling up availability and performance.
  • Mitigating the risks of financial crime.
  • Ensuring effective consumer protection if something goes wrong.
  • Improving information flows to TPPs and end users.
  • Promoting additional services, using non-sweeping variable recurring payments (VRP) as a pilot.

The report also sets out the JROC’s vision for the open banking future entity, including the next steps to be taken in designing it. There will be a transition from the Open Banking Implementation Entity (OBIE) to the future entity, which is expected to start later this year but will take time to successfully complete. In addition, the report outlines the principles that will underpin a long-term regulatory framework, which the government is intending to legislate for.

The JROC plans to continue to work at pace to sustain and build upon the momentum in open banking, including holding a webinar to summarise its proposals in May 2023 and organising workshops and sprints where appropriate to develop the design of the future entity and establish an effective governance framework. In Q4 2023, the JROC will use this input to set out a detailed plan for the future entity and the OBIE’s transition to it.