The head of the UK’s Open Banking Implementation Entity (OBIE) has stepped down after an independent investigation revealed bullying, corporate governance issues and the late delivery of accounts.
It’s not a story heavy on tech details but the changes and dire situation at the OBIE are notable.
Today’s announcement (1 October) by the Competition and Markets Authority (CMA) follows an independent investigation it requested in September 2020.
The OBIE is an independent organisation that, following an Order by the CMA, was set up in 2017 by the nine largest retail banks in Britain and Northern Ireland to implement open banking. These banks are AIB, Bank of Ireland, Barclays, Danske, HSBC, Lloyds, Nationwide Building Society, NatWest and Santander.
Open banking enables consumers and SMEs to share their bank and credit card transaction data with third parties who are then able to provide them with applications and services. It is estimated that half the UK’s small businesses and over four million consumers now use services powered by open banking technology.
Anyway, the investigation considered the issues raised under the following five themes: corporate governance; late delivery of accounts; management of conflicts; procurement and value for money and human resource issues.
To keep it brief, the investigation considered serious allegations regarding bullying, harassment, discrimination and victimisation. Also, the management of conflicts of interest showed “an unacceptable risk”.
Other failures include “very little detail” about the governance arrangements for the OBIE; and too much power was vested in the trustee (i.e. the chief) personally with too few checks and balances.
The investigation therefore concluded that the CMA and the nine retail banks must accept their share of responsibility for all these problems.
As a result, there are personnel changes.
Imran Gulamhuseinwala has tendered his resignation as the OBIE trustee and chair. While Charlotte Crosswell has been nominated as the replacement trustee and chair, to lead the planned transition to the future arrangements for open banking.
New non-executive directors will be appointed to the OBIE board as a priority, to provide appropriate independent scrutiny and oversight.
The open banking implementation phase will complete in 2022. In 2021 the CMA consulted on what arrangements should be put in place for its governance in the next phase of its development. Responses received to this consultation have been published and the CMA is considering these.
