The UK’s financial watchdog has provided an update on the creation of a new standards-setting organisation for open banking, known as the ‘Future Entity’.
The Financial Conduct Authority (FCA) said the body is expected to become the main authority for establishing and maintaining open banking standards in the country.
Over the past six months, the open banking sector has seen what the regulator described as “significant progress”. Building on this momentum, the FCA highlighted that the industry-led initiative aims to roll out variable recurring payments (VRPs) for certain household bills later this year. The development is seen as a critical step in making payments faster, cheaper and more efficient for consumers and businesses, while also fostering economic growth.
According to the FCA, open banking can empower firms to create products and services that help consumers manage their finances more effectively and streamline payments for goods and services. The standards set by the Future Entity are expected to be adopted by commercial open banking schemes, encouraging innovation and strengthening the UK’s position in the global FinTech landscape.
The Future Entity will also be tasked with monitoring the quality and consistency of the technologies that underpin open banking. This oversight will provide valuable insight for the FCA’s own supervisory work, helping to ensure the stability and reliability of the sector.
The regulator emphasised its commitment to working closely with industry and stakeholders to determine the most effective way to establish the new body. The ultimate goal, it said, is to create a thriving, innovative open banking ecosystem.
FCA director of payments and digital finance Matthew Long said, “This is the next step in realising our vision of a more innovative, safe and competitive payments sector, which embraces technological change to better serve people and businesses.
“We expect the Future Entity to play a central role in the next phase of open banking, setting and monitoring the standards that underpin the industry.
“However, we can’t realise this future alone. Our engagement and support from industry continues to play a vital role in the future of open banking, as we build on the momentum we’ve seen in the past 6 months.”
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