The move announced by trade body UK Finance is a bid to comply with a series of requirements imposed by the Competition and Markets Authority (CMA) five years ago, Sky News reported.
Banks including Lloyds, Barclays, NatWest, Santander, Nationwide, HSBC, Danske Bank, Allied Irish Banks and Bank of Ireland, known as the CMA9, were targeted by the order in 2016 following an investigation into the personal current account and SME banking markets.
Using customer data securely, open banking is designed to make it easier for customers to assess their personal banking deals and assess them against rival services by putting all that data on one platform.
The competition watchdog found that the biggest financial services companies were not competing hard enough for consumer business and open banking could be a better option for customers.
The new service company, which will have a slate of independent directors, could pave the way for the open banking model to be extended to a raft of products including consumer credit, insurance, mortgages, pensions and savings.
More to follow.
