Jay Jobanputra

Innovate Finance response to the Joint Regulatory Oversight Committee’s (JROC) proposals for the design of the Future Entity for UK open banking 🏗️ JROC recently consulted on plans for next steps on open banking. In our response we highlight that despite our support and enthusiasm about the opportunities of Open Banking, we have concerns over the proposed approach towards setting up an Interim Entity and the associated costs and potential delays this could cause. We remain to be convinced that a separate legal entity is strictly necessary for the Interim Entity. It creates unnecessary additional costs with a delay in set up whilst a new board and CEO are appointed (which industry has to pay for) creating duplicate governance and leadership roles. There may be circumstances under which a subsidiary is the appropriate structure, but if so we are not convinced a separate board and CEO are required to achieve the desired outcomes. Summary of our response 👇 ⚙️ Future entity corporate structure: We agree with JROC’s recommendation of the Future Entity (FE) being a company limited by guarantee. 💰 Recommended funding model: We have some concerns that the recommended funding model could potentially pose risks that are not in the best interests of the entire open banking ecosystem. It is vital that any funding model does not lead to barriers to entry or create circumstances that inhibit the ability of fast growing but yet to be profitable businesses. ⌛ Interim Entity: We remain to be convinced that a separate legal entity is strictly necessary. Unless there are legal reasons for this, it creates unnecessary additional cost and delay, with a delay in set up whilst a new board and CEO are appointed and additional costs (which industry has to pay for) of duplicate governance and leadership roles. 🧑‍🤝‍🧑 Interim board representation: Innovate Finance is not convinced by JROC’s proposals to introduce a Board consisting of TPP, PSP, ASPSPs and PISP representation. This goes counter to the industry Future Entity working group which recommended an independent board, based on principles of the UK corporate governance code, with directors and board members selected for their skills and not as representatives of different stakeholder groups. 👈 Interim entity board appointments: Innovate Finance recommends that the Appointments Committee should work with recruitment consultants to create relevant job descriptions for the Board positions in consultation with OBL and JROC. Click here to read our full response 🔗 https://lnkd.in/eBMwpcD9 #OpenBanking #JROC #OpenBankingGovernance #OpenBankingFunding HM Treasury | Competition and Markets Authority | Payment Systems Regulator | Financial Conduct Authority | Open Banking | Adam Jackson | Paul Worthington | Megan Jenkins | Jago Corry | Christopher Foo

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New BPFI report looks at how lending capacity of the banking sector can be fully leveraged to meet the State’s significant funding challenge to deliver increased housing output. Read more 👉 https://lnkd.in/eS-_yYVQ

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The Commerce Commission has released its draft determination on our application for authorisation this week. We’re seeking permission to work with open banking stakeholders to make partnering simpler and more efficient, including an accreditation scheme and common terms and conditions for banks and third parties to use. The Commission has proposed approval of our application with conditions. We’re reviewing the draft determination in detail before giving our feedback as part of the process. We’re confident this type of partnering framework will make it easier for banks and third parties to work together – ultimately accelerating the growth of open banking in Aotearoa New Zealand.  Read more on our website here: https://lnkd.in/gTW7m_Q3 #OpenBanking #APICentre #PaymentsNZ #FuturePayments 

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📢The FCA has fined Metro Bank £16 million for significant anti-money laundering (AML) control failings between 2016 and 2020. The bank's inadequate systems failed to monitor over 60 million transactions totalling £51 billion, leaving the financial system vulnerable to misuse. This penalty underscores the critical importance of robust compliance frameworks in the financial sector. Firms must prioritise effective monitoring and swift remediation of deficiencies to safeguard against financial crime. At Objectivus, we help firms establish and maintain robust compliance and financial crime frameworks. For advice or support on strengthening your AML framework or addressing compliance concerns, contact us at [email protected]. For a comprehensive analysis of the FCA's findings read more at: https://lnkd.in/e-6fwPSB

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Clearing shake-up could see UK implementing some of the “positives” from Emir 3.0. https://hubs.li/Q02YV9-Z0 Non-subscribers can get a snapshot of Risk’s coverage. Registration is free and allows you to read two articles a month: https://hubs.li/Q02YVdZ_0

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Our recent research has found that 77% of UK bank innovation leaders say challenging the status quo can put careers at risk. But if everyone is afraid of raising their head above the parapet what does that mean for innovation? Today we published our report – Core Banking Modernisation: The Pitfalls and The Promises. The report analyses data from a survey of 150 innovation leaders at UK retail and business banks showing that while nearly all UK banks recognise the need to modernise on cloud, the road to modernisation is littered with potholes and broken promises – as almost two-thirds of respondents think most cloud-based core banking platforms are just the same legacy tech with a new lick of paint. But of course, not all cloud banking is created equal and the successful adoption of cloud-native core banking is about more than technology. To read the full report, “Core Banking Modernisation: The Pitfalls and The Promises” visit our website, https://lnkd.in/ezndxWvQ #corebanking #cloudbanking #bankingtechnology #fintech #datadrivencore #agileinnovation

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📈 A win for trade finance? A balanced approach to Basel 3.1 in the UK 📌 The Prudential Regulation Authority (PRA) has released its second policy statement on the implementation of Basel 3.1, set to take effect in January 2025. 📄 This policy introduces significant changes to capital requirements for UK banks, with important implications for trade finance, a vital component of the UK’s international trade ecosystem. 📙 In our latest hashtag #TRADEFINANCETALKS magazine Sibos edition, Deepesh Patel is Editorial Director at Trade Finance Global (TFG) and host of Trade Finance Talks, discusses about the Prudential Regulation Authority (PRA) has released its second policy statement on the implementation of Basel 3.1. 📖 Read the article and access the magazine by following the link in the comments section below ⬇️ 🔍 Check out our exclusive coverage, insider insights, and all the latest updates from Sibos 2024. Don’t miss a moment: https://lnkd.in/gbRfix2y #sibos2024 #tradefinance #policies

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We welcome the Treasury's priorities for UK financial services as set out in the Mansion House speech yesterday. The priorities established by the Chancellor align closely with those we set out in our own sector growth strategy, including developing our capabilities in fintech, asset management, and green and sustainable finance. However, some of the measures set out in the recent UK budget, such as the increase in employers' national insurance and capital gains tax, could have a detrimental impact on our ability to achieve these aims. The UK government must take greater action to demonstrate that it is creating a business and policy environment that will support, not hinder, the delivery of our shared ambitions for the sector. https://lnkd.in/eP72EdBB

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We are today announcing financial guarantees that will see Barclays Corporate Banking and Lloyds Banking Group deliver £1 billion of funding to accelerate the #retrofit of social housing in the UK.   Barclays UK Corporate Bank and Lloyds Banking Group will each deliver £500 million of lending to the market that has been enabled by financial guarantees of up to £750m provided by the #NWF. The guarantees will support both shorter duration loans to be provided by Lloyds Banking Group and mid-to-long duration loans to be provided by Barclays UK Corporate Bank, ensuring that financing will cater to every aspect of the social housing market.   We will help create a stable investment environment by mobilising private capital around the Government’s strategic priorities, enabling the market to invest with confidence in clean energy and growth industries. These deals showcase how innovative public and private expertise can come together to deploy private capital to deliver warmer, greener homes for social tenants.   The development of these guarantees with Barclays UK Corporate Bank and Lloyds Banking Group forms part of ongoing efforts by the NWF to improve financing to the social housing sector, a fundamental pillar of the Government’s Warm Homes Plan. An agreement in principle has also been made between the NWF and The Housing Finance Corp. Ltd., a mutual funder to the sector, for a further £150m to help more registered providers gain access to longer term bond markets, which is expected to be announced in due course.   John Flint, CEO of the #NationalWealthFund, said: “We know there are significant barriers to investment in the heat and buildings sector, despite it being a critical element of the UK’s net zero transition. By working with Lloyds Banking Group and Barclays to bring competitive offers to the market, we are helping registered providers access the attractive financing that they need to implement critical retrofit measures, reducing bills and improving comfort for social housing residents across the UK.”   Read more about the deal: https://lnkd.in/e6G7wkHn

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🔍 Consumer Duty Examined: Unpacking the Gains and Gaps. Dive into the latest insights on how the FCA's Consumer Duty reshapes the financial landscape. Discover where firms excel and where improvement is crucial for consumer transparency and fairness. Don't miss out on critical updates as we approach significant regulatory milestones. 🔗https://lnkd.in/eF6ySz_F #ConsumerDuty #FinancialServices #RegulatoryCompliance Rohan Chakraborty, Thistle Initiatives Jennifer Cahill, Cosegic Lorraine Mouat, Thistle Initiatives Financial Conduct Authority

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KBRA released a #research report evaluating the #UK building society sector. KBRA believes the overall #creditworthiness of the UK building society sector remains resilient despite continuing challenges related to Brexit, the post-pandemic recovery, elevated #inflation, #interestrate rises, and Russia’s invasion of Ukraine, all of which weigh on the UK #economy. Read the full report here: https://lnkd.in/eGsVu7qh | #financialinstitutions #insightfulresearch

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Responding to the Financial Conduct Authority (FCA)’s consultation on payment optionality for investment research, AFME (Association for Financial Markets in Europe) has warned that the association’s proposed approach risks misalignment with other financial centres. #Trading #Markets #CapitalMarkets #Consultation #PaymentsOptionality #GlobalTrading https://lnkd.in/e4qCQmW4

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Earlier this week, the FCA published its policy statement PS24/3 on Consumer Credit – Product Sales Data Reporting, following its Consultation Paper last year. The new rules mean the FCA will have more granular data to supervise the consumer credit sector. For firms, it will reduce the current burden of complex and frequent ad-hoc requests. However, their implementation effort should not be underestimated and it will open up a very different set of challenges from the FCA once they get access to this granular level data. These new requirements should be read alongside the FCA’s new capabilities of data analytics, allowing them to digest and interrogate massive data sets and spotting outliers in order to inform their supervision approach. Another step in their journey to become a data-led regulator. Some notable changes within the policy statement versus the initial CP proposals include: ➡ a change to thresholds for in-scope firms. Following feedback and further analysis, the FCA has increased the in-scope threshold from £500k to £2m; ➡ the implementation date has been changed, with smaller firms (£2m - £20m) given 20 months to implement the changes and the larger firms (£20m plus) have 14 months to implement; and ➡ the removal of certain data elements and addition of a further 68 data elements following feedback from firms and trade bodies which will assist in ensuring consistency. The FCA has also clarified, that it will not be de-scoping premium finance from the scope of the return. Instead, the FCA has made some minor changes to the required data to make it more tailored to premium finance providers. Overall, the policy statement is a step in the right direction, and the FCA has acknowledged the complexities within the consumer credit market and reflected these in the new rules. The rules come into force from Q3 2025 for larger firms and Q1 2026 for smaller firms. Firms should start reviewing what they need to do now to meet the deadline and would be well advised to mock up the reporting now to reflect on the conclusions the FCA might draw when they get the data. 📨 Please reach out to the team if you would like to discuss the impact on your business. Philip Salter, Thominah T., Nadege Genetay Michael Sicsic

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