The Joint Regulatory Oversight Committee (JROC)[2] has today set out an ambitious programme of work to take forward recommendations for the next phase of open banking in the UK.
This involves setting up dedicated workstreams to action the six key themes and priorities outlined in the recommendations[3]. To support this, the JROC has launched two new working groups on variable recurring payments (VRP) and future open banking entity. The JROC has also tasked Open Banking Limited (OBL) to lead and coordinate workstreams on four of the other key themes.
This work is crucial in realising the full potential of open banking in the UK. The co-chairs of the JROC, PSR’s Managing Director, Chris Hemsley, and FCA’s Executive Director, Consumers and Competition, Sheldon Mills said:
'Now that we have a roadmap in place to deliver on the next phase of open banking, it’s vital that we work collaboratively and at pace to progress the key priorities we identified.
'These dedicated workstreams, including the two new working groups on VRP and future entity, will make sure the correct foundations are in place for open banking to grow in a safe and sustainable way.'
VRP Working Group
Expanding the use of VRP will allow consumers and businesses to make a wider range of payments more conveniently and efficiently. This could include utilities or charity donations where the amounts paid can vary each time.
At present, VRP use is limited to when individuals want to move money between their accounts (referred to as ‘sweeping’). The working group will develop a blueprint for the phased roll-out of non-sweeping VRP by the end of September 2023.
Future Entity Working Group
There will be a transition from the Open Banking Implementation Entity (OBIE) to a future open banking entity, which will build on the significant progress made to date.
The working group will consider the design of the future entity, including its role, structure, and funding. It will also set out proposals around how the future entity can be implemented. The working group will report to the JROC by the end of September 2023 and the JROC will publish its views in an update towards the end of 2023.
Both working groups will be established by the end of June 2023. The VRP working group[4] will be chaired by the PSR, and the Future Entity working group[5] will be chaired by the FCA. The two terms of reference published today set out the full structure and membership of the working groups.
Working with OBL
Under the JROC’s oversight, the OBL will lead and coordinate on four key themes. These are:
- Levelling up availability and performance
- Mitigating the risks of financial crime
- Developing proposals for dispute processes
- Improving information flows to third party providers (TPPs) and end users
The JROC has today written to OBL[6] setting out specific activities to progress against these themes, which include working with Pay.UK, as the operator of Faster Payments, where necessary.
OBL will provide a monthly update to the JROC on this work, and a full ambitious timetable of delivery is outlined in the letter.