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Thursday 22 December 2022 at 4:41 PM
A group of UK-based fintech companies have written an open letter to the Financial Conduct Authority (FCA) seeking more clarity on how open banking will be regulated from 2023.
The letter criticized the Joint Regulatory Oversight Committee (JROC), a regulatory body set up by the Competition and Markets Authority (CMA) in March. Fintech signatories have claimed that the JROC is vague and vague about its directions and guidelines towards open banking.
Open banking allows banks and third-party financial service providers, such as budgeting applications and cash flow management tools for businesses, secure access to banking and other financial data. in the UK. Open Banking is regulated by the FCA and only companies authorized by the FCA can use the Open Banking API to access financial information or initiate payments on behalf of a customer.
However, according to the open letter, JROC has failed to provide clarity on the direction open banking will take and has asked the regulatory body to move forward. Organized by the Coalition for a Digital Economy (CODEC), a tech industry advocacy group, the letter was signed by companies including Monzo, Vice, Plum and MoneyHub.
The UK fintech sector has over 1600 companies and is the main destination for venture capital in Europe. In 2020, the sector attracted nearly £3b of investment.
“We call on the JROC to publish clear directions and timelines for the continued implementation of open banking in 2023 and beyond as a matter of urgency,” the main section of the letter said.
Commenting on the role of Open Banking, CMA Chairman Jonathan Scott said, “Open Banking is a pioneering intervention helping millions of people and small businesses save money and time. The UK is recognized as an international leader in this space.
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