Just open the pages of a business or technology media outlet and the topic of Open Banking is unlikely to be hard to find. The industry-changing government programme is hugely discussed by stakeholders around the financial services and consumer sectors. Much is made of the consumer opportunities, and rightly so. Price comparison, financial inclusion and consumer empowerment are all hugely worthy causes that all sectors should celebrate. That said, the programme brings unparalleled opportunities the alternative lending sector that are perhaps less widely discussed.
The issues for business to contain
There are, however, numerous barriers involved for businesses when integrating the raw Open Banking framework. First of all, you need to be regulated to do so by the FCA (as an Account Information Services Provider). This in itself is enough to put off many lenders who do not wish to take on the cost involved by taking on a further regulatory burden. Then there is, of course, the issue around maintaining the API integrations with all of the different banking providers and keeping on top of all the changes each individual institution makes. Teams of people are needed for this aspect alone and the technology burden is significant. Finally, there is the most difficult aspect – the issue of what to do once you have the data.
Open Banking API produced data is raw, unstructured and impossible to use in a digital fashion without any adding robust analytics in the form of income identification, categorisation and recurrence modelling. However, in order to produce a set of analytics fit for the market, participants have to have access to vast (millions) data sets of raw transaction information. In order to get that data, they need to pull via the APIs. But without being able to understand the data and use it in the first place, how can a business pull raw data into their lending decision in the first instance? Catch twenty two.
Finally, there is the issue of the consent. In an era where we are used to data breaches and GDPR is prominent, securing and tracking consumer consents when it comes to data has never been more important. This is certainly prevalent in the Open Banking market where consumers will be sharing their transaction data with third parties.
Partnering for instant success
Thankfully for industry participants, there is the attractive opportunity to partner with third party data and technology service providers in order to access Open Banking transaction data. All issues with relation to API access and maintenance – both from a licensing and technological perspective – can be outsourced to companies that are experts in the area. Critically, the same is possible from an analytical perspective.
AccountScore has been in the market serving clients for over two years. It’s AISP platform consents.online, was registered on January 13th 2018 when PSD2 and Open Banking came in to force and we have since been successfully pulling large volumes data from all the available Open Banking APIs for our clients. Our consents management platform, consents.online provides lenders with the consent management platform that is needed for Open Banking allowing consumers to share their data with complete confidence and security.
Most importantly, AccountScore’s analytical engine, which boasts a categorisation engine modelled on over 70 million transaction rows containing 600 million keywords, gives lenders the ability to instantly understand a consumer’s transaction data and drive value right away. Whether its instant income verification, a breakdown of financial services such as loans within the account or an understanding of disposable income, AccountScore provides the ability for lenders to gain insight into a consumer instantly meaning that lenders can start to incorporate and drive revenue, value and operational enhancements from the Open Banking programme right away.