What the Future Entity means for UK open banking

UK open banking is heading for a change of governance, not a change of name. The body that has run common standards, security requirements and the shared directory since 2018 — Open Banking Limited (OBL) — was created and funded by nine large banks under a competition remedy. The government now wants those functions to sit with an industry-established "Future Entity", overseen by the Financial Conduct Authority (FCA) under new statutory powers.

That shift matters to the more than 18 million active UK consumers and small businesses that OBL says use open-banking-powered apps and payment tools, according to OBL's corporate page, though the page does not state when that figure was measured. It also matters to the banks and fintech firms expected to fund and work within whatever body eventually takes over. Whether and how its standards become legally binding will depend on secondary legislation and FCA rules; statutory enforcement is expected to remain with the FCA rather than with the Future Entity itself. And it matters to the industry group now designing that body's rules.

As of 25 September 2026, no primary source confirms that the Future Entity has been formally incorporated, designated or authorised. OBL has been selected only to facilitate the design of the new body. This article separates what is settled from what is still proposed.

How UK open banking is governed today

The current framework rests on two instruments. The Payment Services Regulations 2017 came into force on 13 January 2018, providing the UK's legal basis for payment services and implementing, as UK law, a framework derived from the EU's revised Payment Services Directive. Separately, the Competition and Markets Authority's (CMA) Retail Banking Market Investigation Order 2017 required the nine largest UK retail banking providers, known as the CMA9, to build standardised application programming interfaces (APIs) and to fund a central implementation body — the organisation now called OBL.

That arrangement made OBL a creature of a competition remedy: created by regulatory order and funded by nine specific firms to fix the market failures the CMA identified in 2016. Since the National Payments Vision was published by HM Treasury on 14 November 2024, the FCA has been the lead regulator for open banking, and the Joint Regulatory Oversight Committee (JROC), which previously shared oversight, has been wound down.

What the Future Entity is expected to do

Subject to legislation, the FCA expects the Future Entity to become the primary standard-setting body for UK open banking APIs, as set out in its August 2025 feedback statement FS25/4. Expected functions include common API standards, performance and adherence monitoring, directory and certification services, and work with operators of commercial open banking schemes. The FCA expects it to be a not-for-profit company limited by guarantee, funded by its users and beneficiaries rather than the CMA9 alone, with board appointments made by an independent committee. It is not expected to hold enforcement powers; the FCA is expected to regulate it as an "interface body" instead.

Commercial open banking schemes, separate competing providers offering services beyond the basic standard, are expected to sit in a distinct layer that builds on the Future Entity's common standards but can charge for premium services. The FCA has said it does not expect the Future Entity itself to run commercial schemes where commercial incentives exist, though it might do so where those incentives are absent or the market fails to provide.

Confirmed decisions versus unfinished design

Why the governance is changing

The argument for change is about accountability rather than performance. OBL was built to implement a specific CMA remedy for nine banks. As open banking has grown beyond the CMA9 to cover far more providers and payment volumes, HM Treasury and the FCA have concluded that a body funded by nine large firms under a competition remedy no longer fits a market this size. The intended replacement is industry-established, funded more broadly, and sits under FCA oversight instead of a competition order.

Who controls the process now

In February 2026, the FCA commissioned KPMG to run an independent evaluation of proposals to facilitate the design of the Future Entity. KPMG's report, published by the FCA on 1 May 2026, scored OBL's proposal at 63.88 out of a possible 76 across six categories, against 46.00 for a rival proposal from the Smart Data Group. The FCA said this exercise evaluated who should facilitate the design phase, not who should operate the Future Entity; OBL's selection does not predetermine which organisation will eventually run it.

On 8 May 2026, OBL confirmed it would facilitate an industry-led Future Entity Design Working Group, with industry organisations holding decision-making authority rather than OBL itself. The process is set to address governance, scope, funding and a possible expansion into open finance, though that expansion is not a confirmed initial responsibility. Participation carries a cost: OBL set minimum design-programme contributions of £750 for a small third-party provider with turnover below £5m, and £1,500 for a small account-servicing payment service provider with fewer than 4 million relevant accounts. These are contributions to the design process itself, not confirmed long-term fees, and the full budget has not been published.

One point of terminology needs flagging: a February 2026 government letter described the intended successor as a "permanent, statutory body", while the FCA's own policy statement describes an industry-established company operating under statutory oversight, not a public body in itself. This article follows the FCA's more detailed policy position where the two descriptions diverge.

Funding and representation: what it could mean for firms

A funding base that extends beyond the CMA9 could make the Future Entity more representative of the market it serves. Design-phase contributions already scale by firm size and turnover, suggesting the eventual funding model may follow a similar principle, but the allocation formula, safeguards for smaller firms and final fee levels have not been settled. Design-phase contributions do not indicate the eventual operating charges, and long-term funding obligations for smaller fintech providers remain unresolved.

Voting rights, board-selection detail and protections against the largest funders dominating decisions have also not been fixed. Banks, third-party providers and commercial scheme operators do not yet know who will have influence over the body, or how far its standards will be enforceable once secondary legislation and FCA rules are in place.

What the transition means for users

For the more than 18 million people and small businesses OBL says use open-banking-powered apps and payment tools, the immediate implication is continuity of standards, the shared directory and API performance monitoring, not any change required of individual users. No source reviewed promises that every user-facing service will be unaffected.

It is also worth being precise about the underlying figures. The 18 million active-user figure is a different measure from OBL's separate report, on 8 May 2026, of more than 17 million user connections, more than 2 billion API calls per month and more than 34 million payments per month. "User connections" and "active users" are not necessarily the same measure, and the two figures should not be read as a clean before-and-after comparison.

The change in governance does not alter the regulatory status of any underlying financial product, nor does it automatically change Financial Services Compensation Scheme (FSCS) protection or Financial Ombudsman Service (FOS) access; those depend on the specific provider, service and circumstances. Readers with a concern about a particular open banking service should check that provider's regulatory status and complaints route directly.

The legislative path

The Data (Use and Access) Act 2025 received Royal Assent on 19 June 2025. Part 1, which covers Smart Data schemes, commenced on 20 August 2025. The Act supplies enabling powers rather than a complete open banking regime: secondary legislation is still required to establish the scheme in detail and to confer full oversight powers on the FCA.

HM Treasury's Payments Forward Plan, published 26 February 2026, targeted a standards body capable of becoming the Future Entity by the third or fourth quarter of 2026, a statutory instrument in the fourth quarter, and an FCA policy statement on interface rules in the first quarter of 2027. HM Treasury said these timings are subject to change, and it is unconfirmed whether an FCA consultation on interface rules, also flagged for the third quarter of 2026, had been published by 25 September 2026.

The FCA has also confirmed it no longer plans to create the interim entity that JROC proposed in its April 2024 consultation, which would have seen OBL host an interim structure ahead of a full Future Entity — a plan superseded by the FCA's August 2025 position.

What remains unresolved

Several questions have no confirmed answer yet: the Future Entity's eventual legal name, board membership and launch date; the final funding allocation and voting rights, including safeguards against dominance by large funders; how OBL's intellectual property, staff, directory and technical assets would transfer; the mechanism by which the Future Entity's standards become binding given it will not hold enforcement powers itself; and how far its remit might eventually extend into open finance.

What to watch next

The clearest markers of progress will be the statutory instrument HM Treasury has targeted for the fourth quarter of 2026, any FCA consultation or policy statement on interface rules, the design working group's published blueprint, and a formal announcement naming the Future Entity. The FCA's and HM Treasury's own publications, rather than any commercial intermediary, remain the primary places to confirm what has actually been decided.