UK’s FCA Announces Changes Aimed at Limiting “Risk of Disruption” to Open Banking Services after Brexit

The UK’s Financial Conduct Authority (FCA) has announced certain changes that are aimed at limiting the “risk of disruption” to Open Banking services after Brexit.

The FCA’s changes are intended to allow UK-headquartered third-party providers (TPPs) to use an alternative to eIDAS certificates to gain access to customer account details from service providers, or initiate digital payments, following Brexit. Companies or businesses need to act in order to ensure they’re able to continue to offer Open Banking-related services.

Under the eIDAS Regulation (EU) No 910/2014, a qualified certificate for electronic signature refers to “a certificate for electronic signatures, that is issued by a qualified trust service provider” and fulfills the requirements outlined within the regulation.

As explained by the FCA, eIDAS certificates are needed for TPPs to identify themselves to account providers and allow companies to share customer account details via the Internet in a secure and trusted manner. Under the Strong Customer Authentication Regulatory Technical Standards (SCA-RTS), they are “the only accepted identification standard” that’s currently permitted between Open Banking services providers in the European Union.

In July of this year, the European Banking Authority (EBA) had confirmed that eIDAS certificates of UK TPPs would be “revoked when the transition period ends on 31 December 2020,” the FCA noted. The UK’s financial regulator added that “the near-final instrument, published by the FCA, allows TPPs to rely on an alternative certificate.”

As mentioned on FCA’s website, the changes will mean:

  • UK-based TPPs will most likely have to get a new certificate in order to continue to offer Open Banking services in the country, after Brexit.
  • Account providers (such as banking institutions) will most likely have to make appropriate technical changes to their systems so that TPPs can keep accessing client account details,  by “accepting an alternative certificate and informing TPPs as soon as possible which certificate(s) they will accept.”

Companies are required to review the changes as soon as possible and implement any changes that may be necessary at their earlier convenience, the FCA noted. The agency added that it understands the challenges being faced by the sector, which is why the regulator will be offering a transition period “until the end of June 2021 for complying with our rules.”

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