Savings prompts could fuel Open Banking activity

Credit reference agency Equifax has unveiled telling research on what might drive higher levels of data sharing under Open Banking, six months into the regime.

The firm commissioned Gorkana to survey 2,002 UK adults in May of this year. The results show that 40 per cent of Brits willing to share their bank transaction data with a new lender would do so if that action resulted in product recommendations that would save them money.

Although Open Banking – which opens up access to the transaction data held by major banks on their customers – holds a great deal of promise, practical applications for the framework have been slow to emerge. The majority of product launches and partnerships in this area have so far been focused on smoothing access to credit, often via instant income verification. Consumer lending platforms Zopa and Lending Works have each announced integrations of this kind.

But ironically, a streamlined process when applying for loans was dead last among factors that might persuade consumers to share their data, with just 25 per cent tempted, while 28 per cent could be convinced to do so for a smoother mortgage application process.

The ability to easily compare products from different financial institutions was cited as a motivating factor by 36 per cent of respondents. 34 per cent would consider sharing data in return for being offered tailored incentives to switch to a new provider.

“Since the implementation of Open Banking at the start of the year we’ve seen widespread product developments among banks and fintechs alike, as market players recognise the scope of opportunities available. New products and solutions such as HSBC’s credit application offering have come to market, showcasing the real life consumer benefits the initiative can deliver,” said Jake Ranson, a banking and financial institution expert and CMO at Equifax Ltd.

“Open Banking is moving the sector forward to the digital world and it’s an exciting time. As the rate of product launches accelerates awareness will continue to grow, providing the uplift in consumer engagement needed for the project to be truly transformational.”