The UK’s Midata and Open Banking programmes: a case study of data portability and interoperability requirements

Abstract

This case study uses document and market outcomes analysis of the UK’s tech-nology-focused self-regulatory Midata and co-regulatory Open Banking programmes. It examines how effectively these voluntary and regulator-overseen industry-led actions increased competition and created better functioning, more innovative and diverse markets for personal accounts and small business banking in the UK. It focuses on the use of two technical mechanisms to increase competition: data portability, and interoperability. These programmes went further than the EU’s second Payment Services Directive, including a co-regulatory obligation for the nine largest retail and small business banks to agree a common technical interface and standards for security, user experience, and other areas identified as important to customers, overseen by a trustee appointed by the Competition & Markets Authority (CMA). We explore how these requirements evolved from an ineffective voluntary portability regime to in-depth interoperability obligations imposed by the CMA, which have enabled hundreds of firms to create a thriving UK “fintech” market of complementary financial services.