A new report published by UK Finance, sees the financial services trade body provide its recommendations for all technology stakeholders seeking to develop open banking structures supporting UK business.
The report outlines that the UK currently registers over 2.5 million open banking payments a month compared to just 320,000 in the whole of 2018. UK Finance underlines its continued support for the development of more products and services for consumers.
The key recommendations are outlined on the governance of open banking structures, in which the trade body advises that there should be further development of payment standards.
Open Banking should be supported by industry governance and associated technical groups, following the CMA’s decision on open banking governance and a successor body to the Open Banking Implementation Entity.
In addition, UK Finance calls for the development of ‘multi-lateral industry framework‘ – without which there could be fragmentation in the market. Roles, responsibilities and liabilities of different market participants could be described in such a framework.
Jana Mackintosh, Managing Director of Payments and Innovation at UK Finance, said:The shared vision for open banking payments is to offer customers and merchants a greater choice in how payments are made and received. The recent VRP hackathon demonstrated new and innovative ways open banking payments could be used to make it easier to pay tax, make gaming payments, and shop online. Open banking has an exciting future, and the payments industry is working together to consider how the market could be enhanced for customers and merchants.
There is growing use of open banking payments for e-commerce, and the development of Variable Recurring Payments (VRP) offers the potential to extend open banking to subscription payments in the future. This gives customers more choice about how they pay and an alternative to card-based payments, offering more competition in the market.
UK Finance recently supported a VRP Hackathon which demonstrated use cases for such open banking payments. For example, preventing children overspending on in-game purchases by pre-authorising expenditure, or helping SMEs collect payments faster.
Chris Henderson, Head of Payments and Group Payment Strategy, Tesco Bank, said: Open Banking payments are already working today for many millions of customers and it has the potential to be much more. This report shows how the industry can work together to develop the next phase for open banking for the benefit of customers and businesses.