Global: FCA brings in KPMG to assess proposals for new UK open banking body

The Financial Conduct Authority (FCA) has appointed KPMG as an independent assessor to review competing proposals for the creation of a new standards-setting body for open banking in the UK.

In a letter to trade associations, the regulator confirmed that KPMG will evaluate which organisation is best positioned to establish and operate the future entity responsible for setting standards for UK open banking APIs.

The 12-week assessment is aimed at resolving differing industry views that emerged during previous consultations. While most stakeholders supported a preferred option, the FCA noted that consensus was not unanimous.

Andrew Self, the FCA’s head of open banking, said the review is designed to move the process forward without losing momentum.

“The majority of industry supported one option, but there were opposing views, and it was not unanimous. We expect these perspectives to form part of the assessment,” Self said. “I am committed to a swift exercise that helps accelerate the set-up and clarifies what the Future Entity should deliver.”

One proposal comes from the Smart Data Group, which was established to design a framework for the future of open finance in the UK. It has recommended that the Future Entity (FE) be operated by Smart Data Services (SDS), a newly created not-for-profit company limited by guarantee, governed by an independent chair and board. Under this model, SDS would deliver shared core services across both regulatory and commercial schemes.

Open Banking Limited (OBL) has also put itself forward as a candidate to lead the new body. OBL chief executive Henk Van Hulle said the organisation has secured backing from seven trade associations representing a broad cross-section of the open banking sector.

“We have received widespread endorsement for OBL to facilitate industry collaboration on the design of a neutral, cost-effective, resilient and innovation-enabling Future Entity,” Van Hulle said, adding that the organisation looks forward to engaging with KPMG and industry stakeholders during the assessment.

The FCA clarified that while KPMG will conduct the independent review, the regulator will not directly evaluate the submissions. Instead, it will maintain oversight of the process from a governance and contract management perspective to ensure appropriate delivery and value for money.

Ultimately, the FCA aims to establish a standards-setting body with strong industry backing that can formally assume the role of the Future Entity once statutory powers are introduced.