The FCA has issued feedback on the Joint Regulatory Oversight Committee (JROC) consultation on the design of the future open banking entity (the Future Entity).
Significant progress in open banking
The National Payments Vision (NPV) named the FCA as the lead regulator to progress open banking. The JROC has now been wound down.
The FCA says that open banking can support its priorities, which are 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 receiving Royal Assent.
Over the past six months, while legislation progressed through Parliament and reflecting the priorities set out in the NPV, the FCA has 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 in 2025. This aims to unlock a series of open banking use cases, from paying utility bills to taxes.
The FCA's vision for the Future Entity
Subject to future legislation, the FCA expects the Future Entity to be the primary standard-setting body for open banking application programming interfaces (APIs) in the UK.
Its responsibilities will include:
- Setting common standards that will provide a minimum level of service and interoperability across open banking services.
- Monitoring API performance.
- Ensuring adherence to relevant standards (including providing information to the FCA).
- Providing directory and certification services.
- Working with multilateral agreement owner/operators to develop standards that enable commercial schemes.
The Future Entity is expected to operate as a not-for-profit, collecting revenue on an equitable basis from its users and beneficiaries. The FCA expects 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. The FCA is not going to set up an interim entity.
Commercial schemes
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 deal with problems.
The commercial schemes may or may not be for profit and the FCA expects them to be industry-led. It also expects them to use 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.
The FCA does 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. The FCA says that the Future Entity and operators in the commercial scheme layer are expected to be regulated as interface bodies under the Data Use and Access Act 2025.
Next steps
Before new legislation is made, the FCA will now work with participants across the sector to establish the Future Entity. It will hold a series of workshops and plans to provide an update on how the Future Entity will be established by the end of 2025.
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