Shannon Dudley
Open banking has been reshaping the UK’s financial landscape since 2018. But what’s next? The Financial Conduct Authority (FCA) plays a vital role in ensuring open banking remains secure, innovative, and beneficial, and they’ve just announced a new 5-year strategy. Is the FCA’s 5-year strategy going to help pave the way for the next phase of open banking?
They’ve said “Within a year, we will publish a roadmap for the roll out of Open Finance. We expect the regulatory foundations for the first scheme to be in place by the end of 2027.”
In this article, we explore the FCA’s role, priorities, and impact on the future of open banking and open finance in the UK. Let’s dive in.
The FCA is the UK’s financial regulator, responsible for overseeing financial markets, protecting consumers, ensuring market integrity, and promoting competition.
They are an independent regulatory body, funded by the firms it regulates rather than by the government.
Open banking allows trusted third parties to access financial information from banks and other financial institutions in order to provide services to customers, but only with the customers explicit consent.
This gives customers more control over their data so it can be used securely to help them move, manage and get more out of their money in a simple way.
They play a crucial role in regulating and overseeing open banking in the UK. They act as both a regulator and an enabler of open banking, ensuring open banking is secure, competitive, and beneficial for consumers, businesses, and the broader financial ecosystem. They are responsible for:
They ensure that third-party providers (TPPs), such as fintechs and payment service providers (PSPs), meet strict security, data protection, and operational standards before they can access customer data.
They enforce the Payment Services Regulations (PSRs) 2017, which implemented the Revised Payment Services Directive (PSD2) in the UK, ensuring banks and financial institutions comply with open banking rules.
They actively support innovation by enabling new financial products and services that benefit consumers and businesses.
They set out requirements for strong customer authentication (SCA) and ensures that firms handle customer data securely and with explicit consent.
Alongside the UK’s Competition and Markets Authority (CMA), they have oversight of the OBIE (now Open Banking Limited), which is responsible for ensuring the technical and operational implementation of open banking in the UK.
In March 2025, the FCA launched a new 5-year strategy to deepen trust, rebalance risk, support growth and improve lives. How will they do this? The FCA in the next 5 years will focus on:
• Being a smarter regulator; predictable, purposeful and proportionate. Improving processes and embracing technology to become more efficient and effective.
• Supporting growth, by enabling investment, innovation and ensuring the continued competitiveness of world leading financial services.
• Helping consumers navigate their financial lives by working with industry to boost trust, product innovation and ensuring the right information and support is available.
• Fighting crime, focusing on those who seek to use the fact they’re regulated to do harm. We will go further to disrupt criminals and support firms to be an effective line of defence.
Open banking is set to expand into open finance and beyond as the FCA says: “Within a year, we will publish a roadmap for the roll out of Open Finance.”
Regulations will ensure safer and more reliable open banking services, further ensuring trust between consumers and banks, and thus the use of open banking.
More investment in security and fraud-detection mechanisms.
A clear plan for open banking’s future governance and oversight.
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The FCA’s 5-year strategy is a green light for the continued evolution of open banking in the UK, paving the way for a more competitive, secure, and consumer-friendly financial ecosystem.
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