The Financial Conduct Authority (FCA) has published feedback on the creation of a new industry-led standards-setting organisation – the Future Entity – which is expected to play a central role in the next phase of open banking in the UK.
Over the past 12 months, open banking has continued to evolve, with significant progress made following the passing of the Data (Use and Access) Act 2025 (DUAA) and the transition of responsibilities from the Joint Regulatory Oversight Committee (JROC). The FCA, now the lead regulator for open banking under the National Payments Vision, has confirmed that the Future Entity will be the primary standards body for open banking application programming interfaces (APIs).
A central role in setting standards
The Future Entity will be established as a not-for-profit company, limited by guarantee, with governance overseen by an independent committee. Its remit is expected to include:
- Setting common standards to ensure a minimum level of service and interoperability across open banking.
- Monitoring API performance and consistency.
- Ensuring adherence to relevant standards and providing reporting to the FCA.
- Delivering directory and certification services.
- Supporting commercial schemes by developing the technical standards needed for interoperability.
Importantly, the Future Entity will not act as a regulator or have enforcement powers but will instead provide the framework that enables firms to innovate while maintaining quality and consistency across the ecosystem.
Supporting innovation and growth
Open banking has long been championed as a driver of competition and innovation in financial services. According to Matthew Long, Director of Payments and Digital Finance at the FCA, the creation of the Future Entity marks “the next step in realising our vision of a more innovative, safe and competitive payments sector, which embraces technological change to better serve people and businesses.”
One of the first major initiatives expected under the new framework is the rollout of variable recurring payments (VRPs) for certain household bills in 2025. This development could unlock a wide range of practical use cases – from paying utilities and subscriptions to managing taxes – while offering faster, cheaper, and more efficient payment options for both consumers and businesses.
Commercial schemes alongside the Future Entity
The FCA has also outlined how the Future Entity will coexist with a layer of commercial open banking schemes. These industry-led schemes will set their own rules for how firms interact and resolve issues, while building on the common standards provided by the Future Entity.
While commercial schemes may innovate beyond baseline standards to provide premium services, the Future Entity will step in where commercial incentives are lacking, ensuring a balanced environment that promotes competition while safeguarding interoperability.
What’s next?
The FCA has confirmed that no interim entity will be established. Instead, it will work directly with industry participants over the coming months to develop the Future Entity, with a series of workshops planned through summer and autumn 2025. Further updates on the establishment of the body are expected by the end of the year.
Read the FCA’s full Feedback Statement FS25/4 on the Design of the Future Entity for UK Open Banking
