The Future State of Open Banking

UK Finance, in association with Accenture, have published a very good round up of the state of Open Banking.  The main observations of the model that is being developed by OBIE are described below.

Download the full report here: The Future State of Open Banking

Proposed Model

The core principles of the model are: i) there should be standardisation to drive end-user benefit, security, competition and innovation in the wider open banking
environment, ii) there should be industry ownership and governance transitioning from a CMA Special Purpose Vehicle to a market-led one, and, iii) Open Banking ecosystem participants should pay fairly and equitably for the assets and services of Open Banking.

There are 5 major parts to the proposed model:

1. A monitoring function that reviews the performance of the CMA9’s ongoing compliance with the CMA Order. This will be separate from, and independent to the provision of Open Banking services.
2. A set of membership groups / schemes acting as customers to receive services from Open Banking Limited. These groups could already exist and be supported by trade associations or other organisations like Pay.UK for Confirmation of Payee.
3. Firms will pay ‘fair and equitably’ for their use of central services, this shall be proportional to usage and size of firm, including ASPSPs and TPPs.
4. A ‘service company’ i.e. Open Banking Limited, that shall provide services to customers in line with their mandates. At a minimum, this shall include PSD2  and Open Banking services relating to a directory, Open API Standards development and a dispute management system.
5. The re-use of the capabilities of OBL to meet other industry and regulatory mandates as they emerge. This could be market driven (‘Commercial APIs’) or borne from regulator / government direction (Open Finance / Smart Data).

Summary

One high-level model has been articulated that ensures the continued provision of Open Banking services. It supports the needs of TPPs and allows ASPSPs to meet
their regulatory obligations. It puts in place a monitoring function to assist the CMA, and it provides a foundation to be used for a wider set of ‘open’ initiatives. Further work is needed to close out outstanding design issues.

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Open Banking Excellence – Open Banking around the world

Yesterday Helen Child of Open Banking Excellence held an extremely informative and engaging webinar with some good speakers from Google, Mastercard, Revolut and Accenture.  If you don’t follow Helen’s webinars and Meetups you’re missing out – join up here.

I’ll do a review on Monday as there was some fascinating stuff discussed.

John Doyle, Managing Director, The Payments Business

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Emerging Payments Association Webinars and Training

The Emerging Payments Association has planned some really interesting webinars and training scheduled for the next couple of months.

The first is their training for payments 101 course.  Planned for 29th and 30th June.

The second is their webinar on Financial Inclusion, sponsored by: Mastercard on the 7th July 2020 at 11am BST to explore how the payments industry has responded to the current crisis.

For sign up details for all these events go to: The EPA Sign Up page

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Payment News Headlines

All our Payment News Headlines can be viewed here 

Today’s Guest News Headlines are from:

FS Club – Breaking News

This is no Black Swan (Part Two)
The Financial Services Club Blog
I was having a bit of ding-dong over my article about the coronavirus pandemic being perfectly predictable and not a black swan. There are many who believe the reaction to the pandemic is a black swan, as in the lockdown of Planet Earth. Hmmm … what reaction did we think …

European Central Bank hands out 1.3 trillion euros in loans
The European Central Bank has handed out 1.31 trillion euros ($1.46 trillion) in long-term, ultra-cheap credit to hundreds of banks as part of its emergency support aimed at cushioning the impact of the coronavirus pandemic on businesses and workers.

Wirecard shares slump over missing €1.9bn
The German payments company says about a quarter of the money on its books might not exist.

To understand the new wave of small investors, look to China
Speculation is as old as the hills, but you can count on some variations

The successes of the Fed’s dollar-swap lines
America’s central bank shines in a global role it resents

Barclays, HSBC and Lloyds among UK banks that had links to slavery
Many bank directors received compensation after slavery was made illegal in 1833 The slave trade was abolished in the British Empire in 1807 but it was not until 1833 that the Slavery Abolition Act finally banned the ownership of other human beings. However, 46,000 slave owners continued to benefit financially

Bank of England apologises for role of former directors in slave trade
Bank pledges to remove statues and paintings from public display The Bank of England has apologised for the involvement of some of its past governors and directors in the slave trade, and pledged to remove all statues and paintings of them from public display in its Threadneedle Street headquarters. Companies

Coronavirus: Bank pumps £100bn into UK economy to aid recovery
Bank of England announces huge stimulus to aid recovery from the “unprecedented” coronavirus downturn.