The CMA9 consists of nine major UK banks and building societies selected for their significant presence in the market. These banks are:
- Allied Irish Bank – AIB Group UK
- Bank of Ireland
- Barclays
- Danske Bank (Northern Bank Limited)
- HSBC
- Lloyds Banking Group
- Nationwide Building Society
- NatWest Group
- Santander
These institutions are pivotal in shaping the UK’s banking landscape and have been integral to the development of Open Banking.
Understanding CMA9: Who They Are and Their Role in Open Banking
The CMA9 refers to the nine largest banks in the UK. These banks were chosen by the Competition and Markets Authority (CMA) due to their large market share in personal and business current accounts. In 2016, the CMA tasked these banks with implementing Open Banking, a revolutionary initiative aimed at enhancing competition and fostering innovation within the financial sector. The ongoing obligations and progress of individual banks in offering a wide range of open banking services to customers highlight the collaborative effort and tangible benefits that open banking-powered products can bring to society as a whole.
Open banking, driven by the CMA9, enhances financial services efficiency, improves pricing, and introduces innovative solutions, thereby intensifying competition and encouraging financial innovation across Great Britain and Northern Ireland, whilst giving customers more transparency and control. On the consumer side, open banking enables consumers to share financial data, through application programming interfaces (API), with third party providers to gain access to better and more personalised financial products.
The Importance of the Competition and Markets Authority (CMA)
The CMA is an independent department of the UK government tasked with promoting market competition and fairness while reducing monopolies. Its operational functions include Markets, Mergers, Enforcement, Consumer, and Remedies, Business, and Financial Analysis. The CMA can take legal action against companies violating competition or consumer laws, including imposing fines or sanctions.
The CMA initiates market studies to investigate anti-competitive practices or consumer harm, influencing the selection of banks for initiatives like open banking. This ensures that the market remains competitive and fair, benefiting consumers and businesses alike.
The Selection Criteria for CMA9 Banks
The CMA9 banks were selected for their significant market share, collectively holding over 90% of the UK’s consumer and small business bank accounts. This selection was driven by the CMA’s findings that increased competition among banks was necessary. The chosen banks were mandated to open up customer data using secure data protocols, in order to enable TPP’s to offer a wider range of financial services and products to consumers and businesses. In 2017, the chosen banks were mandated to launch their open banking initiatives, establishing them as key players in the ecosystem.
Open Banking Implementation Entity (OBIE) and the CMA9
The CMA mandated the creation of the OBIE to promote innovation, transparency, and competition in the UK financial services sector. The OBIE supports the CMA’s vision for the future of open banking through monitoring, regulatory oversight, and sustainable practices.
The Joint Regulatory Oversight Committee (JROC) will oversee the future development of open banking after the actions in the CMA’s Order is completed.
The Role of OBIE in Open Banking
The OBIE, formed by the CMA9, is responsible for enforcing the CMA Order obligations and overseeing the standardisation and implementation of open banking APIs. It created the UK’s Open Banking Standard, which includes detailed specifications and guidelines for APIs used in open banking, facilitating innovation and competition in the banking sector.
Collaboration Between OBIE and CMA9 Banks
Following the CMA’s market investigation into UK retail banking, the OBIE was established to work with the CMA9 banks on creating open-source open banking APIs by January 13, 2018. The CMA9 banks report their open banking user numbers to Open Banking Limited (OBL), demonstrating their continued engagement with open banking implementations led by the OBIE. These collaborative efforts have been successful, with open banking-powered products serving over 6.5 million users to date.
Ozone API and the CMA9
Ozone API plays a significant role in influencing UK Open Banking standards by providing a robust framework for API development. As open banking develops, we remain at the forefront of open banking regulatory changes and developments, providing leading APIs with out-of-the box compliance. For more information, refer to Ozone API’s blog on building an open standard.
