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By Huw Jones
LONDON, March 5 (Reuters) - Britain's competition watchdog
wants a new independent banking industry body to accelerate
take-up of "open banking" apps to spawn new fintech companies
and offer more choice to consumers.
Open banking allows third-party internet based applications
to compete with big banks by accessing a customer's accounts to
make payments, or find better deals on loans and other services
and products.
The Competition and Markets Authority on Friday launched a
public consultation until the end of March on strengthening how
the financial sector operates open banking and ensures
sufficient competition.
Open banking has made a "good start" with hundreds of apps
now available and around 450 firms in the pipeline, the CMA
said.
"While the largest banks have shown signs of embracing open
banking, they may also have an incentive to slow the further
development of the open banking ecosystem, where this conflicts
with their own commercial objectives," the CMA said.
HSBC, Lloyds, NatWest and Barclays continue to dominate high
street banking, and the CMA wants the new industry body to push
forward open banking.
It would replace the Open Banking Implementation Entity or
OBIE, an interim body funded by big banks and led by a trustee
Imran Gulamhuseinwala.
"Open banking has been critical to supporting the UK's
emerging and growing fintech industry," Gulamhuseinwala said.
UK Finance, which represents Britain's banks, has put
forward a blueprint for a not-for-profit company, but the CMA
said there was a risk of big banks having an "inappropriate"
influence over the new body's chair.
An "independent and vigorous" chair was needed to oversee a
period of growth and not "quiet consolidation", the CMA said.
There are over three million users of open banking apps in
Britain, with new users being added at the rate of a million
every six months. Usage is expected to increase further as the
government uses it to collect tax from companies.
Many of the apps are provided by fintechs, a critical growth
sector for the government as it seeks to bolster the City of
London's global attraction after being cut off from the European
Union by Brexit.
(Reporting by Huw Jones; editing by Emelia Sithole-Matarise)
