We summarise and respond to feedback to the Joint Regulatory Oversight Committee (JROC) consultation on the design of the future open banking entity (the Future Entity).
The National Payments Vision (NPV) named the FCA as the lead regulator to progress open banking. JROC has been wound down.
Open banking can support every one of our priorities – driving growth, simplifying regulation, making peoples’ financial lives better and fighting crime.
There has been significant progress in open banking over the last 12 months, including the Data (Use and Access) Act 2025 (DUAA) receiving royal assent.
Over the past 6 months, while legislation progressed through Parliament and reflecting the priorities set out in the NPV, we’ve closely monitored an industry-led initiative that will create a new industry-owned body. The new body will run a commercial scheme designed to enable the rollout of variable recurring payments (VRP) in 2025. This aims to unlock a series of open banking use cases, from paying utility bills to taxes.
Subject to future legislation, we expect the Future Entity to be the primary standard-setting body for open banking application programming interfaces (APIs) in the UK.
Its responsibilities will include:
The Future Entity is expected to operate as a not-for-profit, collecting revenue on an equitable basis from its users and beneficiaries. We expect it to be a company limited by guarantee, with board appointments made by an independent committee.
Subject to legislation, the Future Entity will not be a public body or have its own enforcement powers.
There are areas where the role of the Future Entity may evolve or expand in the future, including expanding its role into open finance.
We no longer plan to set up an interim entity.
Separately, there will be a competitive layer of open banking schemes, operating commercially. These commercial schemes will develop the rules that govern how firms interact and put things right when they go wrong.
The commercial schemes may or may not be for profit and we expect them to be industry led. We expect this scheme layer to utilise the common API standards developed and overseen by the Future Entity, to ensure interoperability. Commercial scheme operators may innovate beyond these standards to provide premium services.
We do not anticipate that the Future Entity will own or operate commercial schemes for open banking where there are incentives for market innovation. However, where there are not commercial incentives, or there are other market failures, the Future Entity may run those schemes.
We expect the Future Entity and operators in the commercial scheme layer to be regulated as interface bodies under DUAA.
Ahead of legislation, we will now work with participants across the sector to establish the Future Entity.
To do this, we will hold a series of workshops over the summer and into autumn.
We expect to say more about how the Future Entity will be established by the end of 2025.