Independent Assessment to Support Establishment of a Future Entity

Why It Matters

An independent assessment provides a credible foundation for building a unified standards‑setting body, crucial for scaling open‑banking services and maintaining consumer trust. It also positions the FCA to make informed regulatory choices before gaining formal legislative powers.

Key Takeaways

• FCA appoints KPMG for independent Future Entity assessment
• Assessment targets standards‑setting body for UK open banking APIs
• Letter outlines roles of FCA, industry, trade associations, assessor
• Process aims to inform decisions before FCA gains legislative authority
• Firms invited to engage with assessment and provide feedback

Pulse Analysis

Open banking has transformed how financial data is shared, but its rapid expansion has highlighted the need for a cohesive standards framework. In the UK, the FCA has long championed a collaborative ecosystem, yet the absence of a dedicated standards‑setting body has left gaps in consistency and security. By commissioning KPMG to perform an independent assessment, the regulator signals a strategic shift toward formalizing governance structures that can keep pace with evolving API technologies and consumer expectations.

The KPMG assessment will scrutinize proposals for a Future Entity, focusing on governance models, technical specifications, and the delineation of responsibilities among banks, fintechs, and trade associations. Crucially, the letter clarifies the roles of each stakeholder, ensuring that the assessment process remains transparent and inclusive. This approach not only mitigates potential conflicts of interest but also encourages industry participants to contribute insights, fostering a sense of ownership over the emerging standards. The independent nature of the review adds credibility, which is essential for gaining broad acceptance across the fragmented open‑banking landscape.

For the market, the assessment’s findings could become a blueprint for a unified standards‑setting body, accelerating product innovation and reducing compliance costs. A well‑defined Future Entity would streamline API integration, enhance data security, and bolster consumer confidence—key drivers for wider adoption of open‑banking services. Moreover, the FCA’s proactive stance, even without legislative power, positions it to swiftly enact regulatory measures once the appropriate authority is secured, ensuring the UK remains a leader in open‑banking innovation.