Inquiry finds British 'open banking' body failed to stop bullying - Reuters UK

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Skyscrapers in The City of London financial district are seen in London, Britain, September 14, 2020. REUTERS/Hannah McKay/File Photo

LONDON, Oct 1 (Reuters) - An organisation set up to promote open banking in Britain had poor governance and failed to stop bullying and intimidation of staff, an independent investigation instigated by the Competition and Markets Authority (CMA) said on Friday.

The Open Banking Implementation Entity (OBIE) was set up in 2017 under the CMA's orders by Britain's nine biggest lenders to share transaction data with new entrants and promote competing services in a sector long-dominated by a handful of banks.

The inquiry was called for by the CMA a year ago and looked into corporate governance, late delivery of accounts, management of conflicts, procurement, value for money and staffing issues.

"It found that inaction and failures by the leadership of the OBIE allowed a culture of bullying and intimidation to prevail," the CMA said in a statement on Friday.

"Separately, it found there was a failure properly to manage conflicts of interest at the organisation and though it did not find any evidence that this was exploited for private gain, there was an unacceptable risk that it might have done so."

OBIE's head, known as a trustee, Imran Gulamhuseinwala, did not ensure that the OBIE was properly managed and had too much power with too few checks and balances, the CMA added.

Gulamhuseinwala has resigned and is being replaced by Charlotte Croswell, who joined OBIE this year, the CMA said. New non-executive directors will be appointed as a priority.

"It has been my privilege to serve in the role of the open banking implementation trustee when I picked up the reins in 2017," Gulamhuseinwala said in a statement.

The investigation concluded that the CMA, and the nine retail banks who set up OBIE, must accept their share of responsibility for not putting in place stronger governance mechanisms from the outset, the statement said.

The CMA must also study lessons from the failings in how OBIE was run, Chair Jonathan Scott said, adding it was therefore launching a review.

Reporting by Huw Jones; Editing by Alexander Smith

Our Standards: The Thomson Reuters Trust Principles.

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