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

Abstract

This article examines how self-regulatory and then competition authority-imposed requirements for data portability (Midata) then interoperability (Open Banking) in the UK’s retail banking markets were used to increase competition and create better-functioning, more innovative and diverse markets for personal accounts and small business banking, and related services. These requirements 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 (API) and standards for security, user experience, and other areas identified as important to customers, overseen by a trustee appointed by the Competition & Markets Authority. This case study explores how these requirements evolved from ineffective portability requirements to in-depth interoperability obligations, which have enabled hundreds of firms to create a thriving UK “fintech” market of complementary financial services, although so far having less impact on direct competition with incumbent banks.