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We will learn from past mistakes to help open banking deliver on its mission as a public good, the new chief executive, Charlotte Crosswell, has said as she takes over following a bullying scandal at the Open Banking Implementation Entity (OBIE).
Under new leadership, the OBIE will commit to working to ensure that there is no repetition of any failings and inadequacies, historical or otherwise, said Crosswell, who has taken up the post as chief executive at the UK’s OBIE.
The OBIE came into being in January 2018, having been set up by the UK’s antitrust watchdog, the Competition and Markets Authority (CMA).
Although the UK approach has been heralded for pushing it ahead of its European peers in opening up financial data, the OBIE has recently been marred in scandal.
An investigation into complaints made at the OBIE uncovered that it has allowed a culture of bullying and intimidation to prevail. This ultimately led to the resignation of now-former OBIE chair Imran Gulamhuseinwala.
“Simply put, what happened was unacceptable and can’t happen again,” she said, adding: “On behalf of OBIE, I want to take this opportunity to sincerely apologise to anyone who feels negatively affected or let down.”
The investigation, which was led by Alison White, a non-executive with experience for the CMA, further found failures to properly manage conflicts of interest at the organisation. Although it did not find any evidence that this was exploited for private gain, there was an unacceptable risk that it might have done so.
The investigation interviewed a number of existing and former employees who described toxic workplace culture, including “a number of incidents of alleged bullying and harassment” going as far as to say that misconduct could be deemed unlawful under the UK’s Equalities Act.
Among the incidents that were cited by those interviewed included allegations of potentially racially motivated and sexist bullying.
Upon its release, CMA chair Jonathan Scott said: “This is simply unacceptable and we agree with Alison White that everyone involved needs to accept their share of the responsibility for this and act on the lessons learned.”
Crosswell is charged with leading the planned transition to the future arrangements for open banking.
Meanwhile, the appointment of new non-executive directors to the OBIE board will be prioritised to give appropriate independent scrutiny and oversight. The OBIE will also work with the CMA and CMA9, the coalition of banks mandated to implement open banking, to put the appropriate measures in place surrounding their appointments.
“With the CMA soon to announce the next steps towards the model for the future governance of open banking we are at a key inflexion point,” said Crosswell. “I hope this will give us greater clarity and enable us to fully implement the kind of leadership, governance and structure, alongside a supportive, diverse and inclusive culture, that is vital for a progressive and permanent organisation.”
Crosswell has more than 25 years of experience in the UK's financial services sector, having served as president of stock exchange group Nasdaq, a board director at trade association The CityUK and as chief executive of Innovate Finance, the UK's lobby group for the fintech industry.
Crosswell was chief executive at the trade association when it submitted its consultation response regarding future oversight of the OBIE.
This expressed concern in particular at the entity adopting proposals from banking lobby group UK Finance. These proposals suggested that the CMA9 should be obliged to fund a future entity for three years, but after that could withdraw membership within six months.
“Innovate Finance members are concerned that the current composition of the Future Entity proposed by UK Finance fails to demonstrate enough independence and flexibility to accommodate a changing sector that is likely to grow and evolve over time,” the response said.
In particular, the newly proposed model could lack sustainability, the trade association warned.
“The ability of the banks to withdraw membership, and therefore funding during the lifetime of the Future Entity, does not create the conditions for a certain and stable model that the industry can be confident will have longevity, a vital factor if the UK’s ambitions for Open Banking and Open Finance are to be realised,” it cautioned.
