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Open Banking in The UK: CMA Publishes Findings of ‘Lessons Learned’ Review

The Competition and Markets Authority (CMA) has published the findings and recommendations of a review to identify lessons from open banking.

Significant governance failures at the Open Banking Implementation Entity (OBIE) were identified in an independent report which was published in 2021.

Kirstin Baker, a CMA non-executive director, has led a ‘Lessons Learned’ review into specific lessons for the CMA in its approach to designing, implementing and monitoring remedies in future market investigations.

Her review has found that the technical solutions to achieve the open banking remedy have and continue to be successfully implemented. However, the CMA did not fully anticipate the scale and complexity of its remedy and it failed to foresee or manage some of the key risks inherent in the delivery of the project, in particular in relation to governance at the OBIE and relationships with key stakeholders.

The review makes seven recommendations to the CMA:

  1. Build more effective board oversight and risk management of the end-to-end strategy for complex remedies
  2. Set out processes and governance for CMA board and executive oversight of the delivery and implementation of remedies
  3. Consider questions relating to implementation at the remedies design phase
  4. Ensure key factors are considered where a remedy establishes a new entity or large and enduring CMA function
  5. Include gateways in the remedy delivery and implementation process
  6. Implement effective and agile internal governance and stakeholder engagement in remedy delivery and implementation
  7. Conduct an evaluation case study of complex market investigation remedies

Kirstin Baker, said: “The open banking remedies are some of the most complex ever implemented by the CMA and have been important in opening up competition in retail banking and supporting the growth of UK fintech. Many stakeholders I spoke to for this review underlined that the CMA should continue to be bold and innovative in using its market powers to benefit consumers.

“However, the board recognised that there were lessons for the CMA to learn from the governance failings at the OBIE identified by Alison White and my review has found that the CMA did not match the ambition of the remedy with an appropriate level of oversight or strategic risk management.

“The CMA seeks to be a learning organisation and I am pleased that staff at all levels engaged constructively with this review and that changes have already been made or are in progress to address the issues identified.”

The CMA will publish a further update next year on its progress in implementing this work programme on remedies. Its response to the consultation on the future oversight of open banking was published on 25 March.


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