72% of consumers haven’t heard of Open Banking
Mark Dryden is business development manager of 360 Dot net
Since its introduction over six months ago, Open Banking was heralded as being the biggest improvement to UK Banking since the Cash Point back in the Summer of Love, 1967.
The legalisation permissively opens up current account data of the top 9 banks, seeking to increase competition and encourage new levels of servicing and innovation.
For the mortgage and protection industry, this creates a number of opportunities to utilise current account data for retrieving bank account statements, automatically filling out budget planners, real-time risk profiling and on-demand / on-risk protection products.
But a YouGov poll from last month revealed that almost three-quarters of UK consumers have not even heard of Open Banking with 77% harbouring concerns about sharing their data with companies other than their bank.
This certainly doesn’t mean that Open Banking is doomed to fail, rather it highlights some of the principal challenges for Open Banking, those of adoption and trust.
Unfortunately, these two factors are reliant on how banks and those nimble innovators create services and applications that wrap around Open Banking and, more importantly, how secure and successful they are.
For the mortgage intermediary with an Open Banking enabled FactFind where the customer provides access to their current account data through the intermediary’s portal, it appears that this may initially require some endorsement by the adviser to reassure the client.
But delivery through a secure online site with the inbuilt access controls given through the Open Banking API to limit who they are provided data to and for what time period, along with the persuasive GDPR underpinning the exchange, Open Banking can only have a positive impact for the mortgage industry.
Layer the ability for this data to be shared downstream in the process: clients, advisers and providers will quickly start to realise its benefits.
It is an old but well-established adage that consumers are willing to share personal data if there is a positive outcome to themselves.
If Open Banking and its many applications gain popularity, the greater likelihood it is that customers requiring mortgage and/or protection advice will be willing to share their data through Open Banking or more specifically asking the question why they cannot share their data in the first place.
True, Open Banking may have created a lot of column inches with little substance – but the signs are this is a long and slow burn, which once it catches, there will be no stopping it.