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A UK minister has suggested that a state-backed timetable for the rollout of open banking has been finalised and will be published within one or two weeks.
Speaking at Pay360 in London on Wednesday (March 20), Conservative MP John Penrose said that his ministerial colleague had “committed news” last week when he unexpectedly revealed the plans.
“I asked him a question in parliament and he confessed, but I'm not sure he was supposed to,” said Penrose.
“His officials had their heads in their hands after he said it, but he said: ‘Look, I signed this off, and it left my desk yesterday’.”
The Cabinet colleague in question was Kevin Hollinrake, minister for enterprise, markets and small business, who was appointed to the position in October 2022.
Penrose said he has been pushing Hollinkrake and other Cabinet ministers to ensure the UK has a timetable for the rollout of open banking throughout the UK economy.
“It's all very well having something that covers the high-street banks, but what about other sectors of the economy?” said Penrose.
“What about energy? What about water? What about health? What about telecoms? What about online retailing?
“All these other sectors are potentially ripe for disruption in the same way, but which sectors, and in what order?”
Penrose described his proposed timetable as an “investable list” of sectors that stand to benefit from open banking, and deadlines for industry and government to cooperate to invest in these sectors.
Penrose said he has been pushing for this “for some while”, and his efforts now appear to have paid off.
A bill and timetable combination
But the timetable is not just a standalone project. Penrose said it will be twinned with the passage of the Data Protection and Digital Information Bill (DPDI), which is likewise imminent.
The MP described the DPDI as “one bill to rule them all” as far as privacy, automated decision-making and obligations for data processors and controllers is concerned.
However, throughout the evolution of the bill, Penrose has been of the view that it is still missing two or three important details, one of which is “pace”.
“Open banking is something that seems to be a British success story,” he said. “We are in a wonderful position, and it's something we are leading the world in.
“The level of penetration and uptake of open banking in this country is much higher than the rest of the world.
“We have a commercial lead in this area but if we stand still, they will overtake us.”
One example that was often quoted at this year’s Pay360 was that of HM Revenue & Customs (HMRC), which in 2021 became the first government agency in the world to introduce open banking payments.
Since then, HMRC has received about £12bn in open banking payments, including £3.3bn via its partner Ecospend in January 2024.
However, highlighting examples such as UPI in India and Pix in Brazil, Penrose said other countries are in some cases “technologically further ahead” of the UK, and could quickly catch up in open banking.
He therefore sees the timetable as an important catalyst to ensure that open banking spreads across sectors, and is not confined to a handful of use cases.
Beyond a multi-sector rollout, Penrose said there is nothing stopping the UK from “stretching” its lead and exporting its open banking technologies and infrastructures to the rest of the world.
Standards setting: Penrose’s second ask
In addition to the timetable, Penrose has called on the government to agree on a plan for standards setting in UK open banking.
This idea has found strong support from the payments industry, including from Teresa Connors, chair of The Payments Association, who spoke highly of it at Pay360, but the government has not yet committed to it.
“It's all very well saying that we're going to take what's happening in open banking and apply it to energy, let’s say, but what happens if the data standards in energy don't talk to the data standards in open banking?” said Penrose.
“We are missing an enormous opportunity if they aren't interoperable, because at that point, you basically have to reinvent the wheel every time you roll out open banking into a new sector.”
If the rollout of open banking in the UK proceeds in a stunted and fragmented way, the UK will lose speed and productivity will suffer, he said.
So the MP is “devoutly” hoping that, following the publication of the timetable, the government will commit to creating a standards setting body.
The body could be similar to the government’s existing Smart Data Council, he suggested, but the form it takes is less important.
“I don't care who it is: they need to be competent, they need to be capable,” he said. “There are a couple of organisations it could be, but we need to choose one and give them the mandate.”
Penrose then turned to the Pay360 audience and said: “It could be you.”
