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UK’s CMA Finds Open Banking Entity Failed to Stop Intimidation, Conflicts of Interest

An independent investigation set up by the Competition and Markets Authority (CMA) found that the Open Banking Implementation Entity (OBIE) has had poor governance and didn’t stop bullying and intimidation of staff, Reuters writes.

The inquiry into OBIE was called a year ago, looking into corporate governance, late account delivery, management of conflicts, procurement, value for money and staffing issues, and the investigation found that “inaction and failures by the leadership of the OBIE allowed a culture of bullying and intimidation to prevail,” a statement from the CMA said.

In addition, the inquiry found that there was a failure to “properly to manage conflicts of interest at the organization, 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 was enacted in 2017 under the CMA’s orders by Britain’s nine largest lenders. The idea was to share transaction data with new entrants and also promote competing services so as to have a more democratic way of doing business, rather than letting the same handful of banks dominate everything.

But the report from the CMA now says the head of the group, Imran Gulamhuseinwala, had an oversized amount of power and not enough checks and balances, not ensuring that OBIE was managed right.

The conclusion of the investigation was that the CMA and the retail banks who made OBIE would have to accept responsibility for the failings, as well as “study lessons” on how the effort failed.

In August, the CMA also expressed concern over the NVIDIA planned acquisition of British chip designer Arm, over suspicions that competition could be hurt because of it.

Read more: UK CMA Flags Competition Concerns Over Chip-Maker NVIDIA’s Acquisition of Arm

The CMA said that a combined entity would end up hurting competition – NVIDIA’s rivals would have access to Arm’s intellectual property, which is currently used by competitors that make semiconductor chips and other such things.

Competitors, the CMA says, might have less access to those technologies if the acquisition goes forward, and competition in gaming, the Internet of Things, self driving cars and more could be harmed.

 

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