The regulator said there had been “significant progress” in open banking in the last six months, and it wanted to “build upon that momentum”.
This includes the creation of an organisation to support the roll-out of variable recurring payments for some types of household bills later this year.
The FCA said open banking could support economic growth by making payments faster, cheaper and more efficient for consumers and businesses. It should also allow firms to develop products and services that make it easier for people to manage their finances and pay for goods.
The standards provided by the Future Entity are expected to be used by commercial open banking schemes promoting innovation in the sector.
The Future Entity is expected to monitor the quality and consistency of technologies used. This should also help inform the FCA’s supervision of firms.
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Open banking can be used to assess the affordability of a mortgage borrower by connecting to their bank accounts and collecting statements, which could speed up the approval process.
Matthew Long, director of payments and digital finance at the FCA, said: “This is the next step in realising our vision of a more innovative, safe and competitive payments sector, which embraces technological change to better serve people and businesses.
“We expect the Future Entity to play a central role in the next phase of open banking, setting and monitoring the standards that underpin the industry.
“However, we can’t realise this future alone. Our engagement and support from industry continues to play a vital role in the future of open banking, as we build on the momentum we’ve seen in the past six months.”
