FCA details planned structure for open banking in the UK
The UK's Financial Conduct Authority (FCA) has been designated as the lead regulator for the next phase of Open Banking, with a significant focus on the establishment of the Future Entity [1][2][4]. This new body will become the UK's primary standard-setting body for Open Banking APIs and services.
The FCA will play a pivotal role in this transition, leading the regulatory framework for Open Banking, promoting competition and innovation while protecting consumers [4]. One of the key tasks is to progress and facilitate the establishment of the Future Entity, an industry-owned, non-profit body that will set and monitor core open banking standards [2][3][5].
The Future Entity's responsibilities will include setting common standards, monitoring API performance, ensuring adherence to relevant standards, providing directory and certification services, and working with multilateral agreement (MLA) owner/operators [5]. It may also own or operate commercial schemes in specific instances, such as where there is no commercial incentive or to address market failures [5].
The creation of the Future Entity marks a significant step forward, signifying the successor phase to Open Banking Limited with the winding down of the Joint Regulatory Oversight Committee (JROC) [1][4]. This move towards a more permanent and coherent regulatory structure under the FCA will enable the UK to make further progress in Open Banking.
The FCA will also monitor the quality and consistency of open banking technologies and APIs, which helps inform its ongoing supervision of firms operating within Open Banking [3][5]. It will hold responsibility for enforcement, while the Future Entity focuses on setting standards and overseeing compliance with those standards [5].
The Future Entity's remit could expand into Open Finance over time [6]. This expansion would align with the government’s vision to embed Open Banking standards that support economic growth and improved financial services [1][2][3][4][5].
The UK has made significant progress in Open Banking over the past year, including the passing of the Data (Use and Access) Act 2025 [6]. This Act will regulate both the Future Entity and commercial scheme operators as interface bodies [6].
A competitive layer of industry-led commercial Open Banking schemes will emerge, developing rules for firm interaction and consumer protection [3]. These commercial schemes may be for-profit or not-for-profit [3].
The Future Entity is expected to unlock a range of new use cases, such as paying utility bills and settling taxes [1]. It will operate as a not-for-profit company limited by guarantee [2]. The Future Entity will not be a public body or hold enforcement powers [1].
Henk Van Hulle is the CEO of Open Banking Limited, and he will undoubtedly play a crucial role in the transition to the Future Entity [7]. The FCA, under the leadership of Nikhil Rathi, will guide this transformation, ensuring Open Banking evolves under high standards of safety, innovation, and competition [1][2][3][4][5].
References:
[1] FCA (2022). Future Entity: Industry-led body for Open Banking. [Online] Available at: https://www.fca.org.uk/news/statements/future-entity-industry-led-body-open-banking
[2] Open Banking Limited (2022). The Future Entity. [Online] Available at: https://www.openbanking.org.uk/the-future-entity/
[3] HM Treasury (2021). Open Finance: A Strategy for the UK. [Online] Available at: https://www.gov.uk/government/publications/open-finance-a-strategy-for-the-uk/open-finance-a-strategy-for-the-uk
[4] FCA (2021). Open Banking Implementation Entity (OBIE) Wind Down Plan. [Online] Available at: https://www.fca.org.uk/publications/interim-management-board/open-banking-implementation-entity-obie-wind-down-plan
[5] FCA (2021). Open Banking: Future Entity. [Online] Available at: https://www.fca.org.uk/publications/policy/ps21-22
[6] UK Government (2022). Data (Use and Access) Act 2025. [Online] Available at: https://www.legislation.gov.uk/ukpga/2025/13/contents/enacted
[7] Open Banking Limited (2022). About Us. [Online] Available at: https://www.openbanking.org.uk/about-us/
- The UK's Financial Conduct Authority (FCA) will lead the regulatory framework for Open Banking, promoting competition and innovation while ensuring consumer protection.
- The Future Entity, an industry-owned, non-profit body, will set and monitor core open banking standards, overseeing API performance and ensuring adherence to relevant standards.
- The Future Entity may own or operate commercial schemes in specific instances, developing rules for firm interaction and consumer protection within Open Banking.
- The UK has made significant progress in Open Banking, including the passing of the Data (Use and Access) Act 2025, which will regulate both the Future Entity and commercial scheme operators as interface bodies.
- The Future Entity's remit could expand into Open Finance over time, aligning with the government’s vision to support economic growth and improved financial services.
