A report into the Open Banking Implementation Entity also criticised the competition watchdog and nine banks for governance failures.
The chairman of a unit set up by the competition watchdog to overhaul the UK’s banking sector has resigned following a scathing report into a culture of bullying and intimidation at the organisation.
Imran Gulamhuseinwala, who was the trustee and chairman of the Open Banking Implementation Entity (OBIE), quit after an independent report found that inaction and failures by the leadership allowed harassment and discrimination to prevail.
The report also said the Competition and Markets Authority (CMA) and the nine banks that set up the venture must take their share of responsibility for the failures.
The CMA hired City law firm Mishcon de Reya last year to investigate allegations. The firm worked with corporate governance expert Alison White to produce the report.
It concluded that the CMA and the banks failed to put in place strong governance mechanisms from its launch in 2017.
They subsequently showed a lack of attention to issues of governance throughout the programme and did not improve governance when it became clear the project was becoming more complex and far longer than originally anticipated, the report added.
Separately, it found there was a failure to properly manage conflicts of interest at the organisation and, although 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 OBIE was set up to implement new Open Banking rules, allowing consumers and businesses to share bank and credit card transaction data securely with trusted third parties.
But soon allegations of cronyism and bullying emerged, with suggestions that too much power was placed in the hands of Mr Gulamhuseinwala, as the organisation’s trustee.
The investigation was asked to look at allegations of bullying, harassment, discrimination and victimisation.
It found Mr Gulamhuseinwala had too much power, with too few checks and balances.
He will be replaced by a former fintech boss, Charlotte Crosswell, who joined the OBIE as transition lead earlier this year, and new non-executives will be appointed.
The CMA said it would also have a review into its own role in the issues.
CMA chairman Jonathan Scott said: “The investigation has identified significant failings that require a swift and substantial response.
“It found that serious allegations – including of bullying, harassment, discrimination and victimisation – were not investigated properly by the OBIE and it concluded that this reflected failures in both the management and the governance of the OBIE.
“This is simply unacceptable and we agree with Alison White that everyone involved needs to accept their share of the responsibility for this and act on the lessons learned.”
He added: “The CMA has a responsibility to learn lessons from the failings identified in the governance of the OBIE.
“I am therefore today announcing a review of the lessons to be learned for our approach to designing, implementing and monitoring remedies in market investigations.”
Ms Crosswell said: “I look forward to the CMA’s consultation announcement into the future governance of the OBIE and I hope that this will give us greater clarity and enable us to implement fully the kind of leadership, governance, structure and culture that is important for a progressive and permanent organisation.”