On 18 December 2023, the Joint Regulatory Oversight Committee (JROC), which is co-chaired by the FCA and the Payment Systems Regulator (PSR), published an update on the progress it has made since it outlined its open banking vision in April 2023 and set out its plans to deliver a new generation of payment products and services.

Progress update and future plans

The update has been published in line with JROC’s commitment to publishing a progress update by Q4 2023. This follows JROC’s publication in April 2023 of its detailed report, ‘Recommendations for the next phase of open banking in the UK’, in which it identified a roadmap of 29 actions that will progress open banking in a three-phased delivery approach over the next two and a half years.

In the update, JROC notes that it has made important progress in its completion of Phase 1 of roadmap actions. These actions, which were to be completed by Q4 2023, were considered as the most urgent issues as they provide a full picture of the current state and create the foundations for the future state of open banking in the UK. JROC will commence Phase 2 in Q1 2024 and expects to complete it by the end of 2024, and Phase 3 within the next two years, with each phase building on the last. Phase 3 actions may also require support from the long-term regulatory framework and/or other FCA or PSR regulatory intervention.

Response to VRP blueprint

JROC also published a response to the Variable Recurring Payments (VRP) Working Group’s blueprint for rolling out non-sweeping VRP (i.e. payments between a customer and a business), which seeks to ensure that consumers and businesses can benefit from innovative, flexible payment methods across a range of different sectors. The blueprint recommends payments to regulated utilities, regulated financial services, and central and local government as the first step in creating wider uses for VRP and open banking payments. JROC’s response paper summarises its key findings on the blueprint, and sets out the response of the PSR and FCA in their capacity as co-chairs of JROC.

The response includes a series of next steps that JROC is looking to Pay.UK, Open Banking Limited (OBL) and the wider ecosystem to deliver to enable Phase 1 services to commence by Q3 2024. As part of these next steps, JROC is calling for two implementation groups to be created:

  • A Functional Implementation Group, co-chaired by OBL and Pay.UK, to deliver recommended changes to functional capabilities.
  • A Dispute Resolution Implementation Group, chaired by Pay.UK (as the existing payment system operator), to develop and implement a dispute resolution mechanism.

The PSR and the FCA will monitor the delivery plans of these groups and overall progress towards the launch of Phase 1. JROC will be able to use information captured during this implementation stage and plans to consult if necessary on further enhancements or regulatory intervention as required, to resolve any outstanding issues.

The PSR is also carrying out a separate consultation in order to progress the VRP Phase 1 commercial model. As co-chairs of JROC, the FCA and PSR will use the evidence gathered through the consultation to further develop policy thinking and publish updated proposals later in 2024, including setting out how they will look to measure the success of Phase 1.