The Competition and Markets Authority (CMA) has identified lessons from its Open Banking review to improve the way it makes market investigations.

The recommendations come as part of a review by one of the CMA’s independent non-executive directors, Kirstin Baker. This was sparked by allegations of misconduct at the Open Banking Implementation Entity (OBIE), the organisation created to implement the standards.

The review was designed to find specific lessons the CMA could apply in how it created future market investigations.

Open Banking defines the standards needed to allow third parties to access bank infrastructure. By doing so, additional companies can compete in the financial sector, allowing fintechs to work alongside established financial institutions to offer new and innovative financial services.

In addition, with a focus on transparency and privacy, the standards mean consumers gain more control over their data.

It also helped make electronic payments more secure across Europe, driving innovation in the banking industry.

Open Banking was created by the Payments Services Directive 2 (PSD2) in 2018, following the CMA’s Retail Banking Market Investigation. This set out a blueprint for how banks can improve the ways in which they serve customers and small business.

To implement Open Banking, the CMA ordered the UK’s nine largest banks (the CMA9) to set up the OBIE.

However, in 2020 allegations were made over conduct at the OBIE. This resulted in an independent investigation, which concluded that the then trustee of the OBIE had not ensured that the organisation was properly managed in accordance with the Retail Banking Market Investigation Order 2017. It also found that a lack of appropriate corporate governance had contributed directly to those organisational failings.

This resulted in a new trustee being installed at the OBIE and its governance being strengthened through the appointment of independent non-executive directors and enhancements to its controls, policies and approach risk management.

The review found that the technical solutions used to achieve the Open Banking remedy have and continue to be successfully implemented.

However, the CMA did not fully anticipate the scale and complexity of its remedy and it failed to foresee or manage some of the key risks inherent in the delivery of the project.

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Kirstin Baker, who led the Lessons Learned review, said: “The Open Banking remedies are some of the most complex ever implemented by the CMA and have been important in opening up competition in retail banking and supporting the growth of UK fintech.

“Many stakeholders I spoke to for this review underlined that the CMA should continue to be bold and innovative in using its market powers to benefit consumers. However, the Board recognised that there were lessons for the CMA to learn from the governance failings at the OBIE identified by Alison White and my review has found that the CMA did not match the ambition of the remedy with an appropriate level of oversight or strategic risk management.

“The CMA seeks to be a learning organisation and I am pleased that staff at all levels engaged constructively with this review and that changes have already been made or are in progress to address the issues identified.”

Open Banking celebrated two milestones this year – the fourth anniversary of its introduction into UK legislation, and its adoption by 5 million people.

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