2019 to be the year more lenders trial Open Banking
Ishaan Malhi, chief executive and founder of Trussle
There’s been a lot of discussion around Open Banking in the past year from all of the major banks, with lending being a focus point. As we look forward in 2019, we’ll see the continued progression of digitising the mortgage industry, particularly harnessing the latest technological advances from Open Banking.
This will allow the industry to better understand our customers, ensuring that we can assess the best mortgage deals for them based on their individual circumstances.
We expect to see lenders trialling a new approach to underwriting, combining traditional credit data with transactional data from Open Banking to get a richer view of their customers’ financial situations. This will enable underwriting to become quicker, more accurate and personal. With a shift in consumer needs, we hope that over time this will allow lenders to adopt a more sophisticated approach to underwriting those that have been traditionally underserved including those without much credit history in the UK and the self-employed.
Not only this, but 20% of homeowners claim that there’s too much paperwork involved in the process, and Open Banking will likely overcome this by reducing the administrative burden. With less admin and fewer documents needed, brokers will be in a position to spend more time advising their clients, and borrowers will find the process to be less hassle.
We expect that some banks will begin rolling out low scale tests to integrate Open Banking across 2019, but we may not see the impact on most borrowers for a couple of years.
Aside from Open Banking, it’s worth keeping an eye on the challenger banks who might also move into the online mortgage space over the next year or so. As others move into the space, it will set a high level of standard across the board, making the process radically simpler and more transparent for customers.
At Trussle, we’re on a mission to digitise the end-to-end journey and we’re excited about the technological industry advances that will help us to make the mortgage process more automated, hassle-free, and accessible and affordable to all.