Regulation  

Open banking boss resigns over bullying allegations

Open banking boss resigns over bullying allegations
 Imran Gulamhuseinwala, OBIE's former boss

The man responsible for rolling out open banking has resigned after an independent investigation into allegations of bullying and intimidation.

The investigation, the findings of which were reported to the Competition and Markets Authority in August, concluded that Imran Gulamhuseinwala “did not ensure that the Open Banking Implementation Entity was properly managed” during his time as a trustee.

In a statement published today (October 1), the CMA said “too much power was vested in [Gulamhuseinwala] personally with too few checks and balances”, allowing for a “culture of bullying and intimidation to prevail”.

It also found “there were failings in the system of risk management and internal control and in the management of culture and values and failure to engage in effective workforce engagement, including when complaints were made”.

The regulator continued: “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.”

The CMA concluded: “No steps were taken to improve the governance when the open banking project extended in time and scope.”

The OBIE was created in 2017 following a CMA order to play a key role in the UK’s advancements as a fintech hub.

Its particular purpose has been to get the country’s nine largest retail banks to effectively implement open banking - a technology infrastructure allowing third-party firms to plug into banks’ systems and offer consumers more competitive products.

Grievances explored during the investigation, based on a complaint made in September 2020 against the OBIE, Gulamhuseinwala and other unnamed senior staff members, included corporate governance, late delivery of accounts, management of conflicts, procurement and value for money, and human resource issues.

Former Innovate Finance chief executive Charlotte Crosswell has been nominated by the CMA to replace Gulamhuseinwala as the OBIE’s implementation trustee and chair.

Part of the OBIE’s role has been to drive open banking adoption, but this has proven a struggle. The body reached 3m UK consumers using open banking in January 2021, which experts have dubbed “way behind” targets.

The investigation into Gulamhuseinwala’s governance of the OBIE was headed up by Alison White, an independent non-executive director, with the support of law firm Mishcon de Reya.

“The investigation considered serious allegations regarding bullying, harassment, discrimination and victimisation,” the CMA said.

“It found that inaction and failures by the leadership of the OBIE allowed a culture of bullying and intimidation to prevail.”

But rather than place the sole blame on Gulamhuseinwala, the investigation concluded that all parties - including the banks which established the OBIE and the CMA - must share a responsibility.

“The investigation therefore also concluded that the CMA, and the nine retail banks who helped establish OBIE, must accept their share of responsibility for not putting in place stronger governance mechanisms from the outset, for lack of attention to issues of governance throughout the programme and for not improving the governance when it became clear that the project was becoming more complex and far longer than originally anticipated.”