The Joint
Regulatory Oversight Committee (JROC), which is co-chaired by the Financial
Conduct Authority (FCA) and the Payments Systems Regulator (PSR), has set up ‘dedicated
workstreams‘ for the implementation of open banking in the United Kingdom.
Open banking
provides a way in which consumers and businesses can securely share their
payment accounts’ data with regulated third-party providers (TPPs) in order to receive
customized services, such as lending and payments – an important aspect in the UK’s
fintech ecosystem.
In support of the
next phase of the open banking initiative, which started in 2018, JROC has
created two new working groups to focus on variable recurring payment (VRP)
and a future open banking entity, among the other themes of the initiative. VRP is a type of payment that enables consumers to permit a third-party provider to initiate payments from their bank account on a recurring basis, with the amount charged varying from time to time.
Additionally, the committee has appointed Open Banking Limited (OBL) to lead and manage works streams on the themes of its recommendations for the next phase of open banking in
the UK. In April, JROC
identified five themes for open banking in the country: levelling up availability
and performance, mitigating the risks
of financial crime, ensuring effective consumer protection, improving
information flows to TPPs and end users, and promoting additional services
using non-sweeping variable recurring payments (VRP) pilot, to be implemented
in the next two years.
One of the working groups, VRP Working Group, aims to expand the use of VRPs beyond moving funds between accounts to a broader
range of payment services. The working group is expected to release a roadmap
for the rollout of the non-sweeping VRP by the close of September 2023, JROC said.
Future Entity Working Group
On the other hand,
Future Entity Working Group would oversee the transition from Open Banking
Implementation Entity (OBIE) to an open banking entity to be set in the future.
The working group, which will consider, among other things, the plan’s design,
will report to JROC by the end of September.
“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,” the Co-Chairs of the JROC; PSR’s Managing
Director, Chris Hemsley, and FCA’s Executive Director of Consumer and
Competition, Sheldon Mills, said.
As of April, JROC
reported that more
than 7 million consumers and businesses were benefiting from innovative
open banking, of which 750,000 were small and medium-sized enterprises. In addition, it said open banking payments rose to 68 million in 2022 from 25 million in 2021.
Citi chooses NetDania; FMA warns against imposter; read today’s news nuggets.
The Joint
Regulatory Oversight Committee (JROC), which is co-chaired by the Financial
Conduct Authority (FCA) and the Payments Systems Regulator (PSR), has set up ‘dedicated
workstreams‘ for the implementation of open banking in the United Kingdom.
Open banking
provides a way in which consumers and businesses can securely share their
payment accounts’ data with regulated third-party providers (TPPs) in order to receive
customized services, such as lending and payments – an important aspect in the UK’s
fintech ecosystem.
In support of the
next phase of the open banking initiative, which started in 2018, JROC has
created two new working groups to focus on variable recurring payment (VRP)
and a future open banking entity, among the other themes of the initiative. VRP is a type of payment that enables consumers to permit a third-party provider to initiate payments from their bank account on a recurring basis, with the amount charged varying from time to time.
Additionally, the committee has appointed Open Banking Limited (OBL) to lead and manage works streams on the themes of its recommendations for the next phase of open banking in
the UK. In April, JROC
identified five themes for open banking in the country: levelling up availability
and performance, mitigating the risks
of financial crime, ensuring effective consumer protection, improving
information flows to TPPs and end users, and promoting additional services
using non-sweeping variable recurring payments (VRP) pilot, to be implemented
in the next two years.
One of the working groups, VRP Working Group, aims to expand the use of VRPs beyond moving funds between accounts to a broader
range of payment services. The working group is expected to release a roadmap
for the rollout of the non-sweeping VRP by the close of September 2023, JROC said.
Future Entity Working Group
On the other hand,
Future Entity Working Group would oversee the transition from Open Banking
Implementation Entity (OBIE) to an open banking entity to be set in the future.
The working group, which will consider, among other things, the plan’s design,
will report to JROC by the end of September.
“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,” the Co-Chairs of the JROC; PSR’s Managing
Director, Chris Hemsley, and FCA’s Executive Director of Consumer and
Competition, Sheldon Mills, said.
As of April, JROC
reported that more
than 7 million consumers and businesses were benefiting from innovative
open banking, of which 750,000 were small and medium-sized enterprises. In addition, it said open banking payments rose to 68 million in 2022 from 25 million in 2021.
Citi chooses NetDania; FMA warns against imposter; read today’s news nuggets.
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- Source: https://www.financemagnates.com//fintech/uk-regulators-set-up-new-working-groups-to-expand-open-banking/