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Peer2Peer Finance News | June 26, 2019

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2019 predicted to be game-changing year for Open Banking

2019 predicted to be game-changing year for Open Banking
Suzie Neuwirth

OPEN Banking implementation trustee Imran Gulamhuseinwala (pictured) has predicted that 2019 will be the year that “we realise the full potential” of the data-sharing initiative.

Gulamhuseinwala said that the initial Open Banking launch made “a tremendous step forward” but “was not as good as it should have been” as “the customer journey was not great”.

“It worked but it was a little bit hairy,” he said at the Open Banking Expo in London.

“But actually my work with the government and the banks means that we’re actually going to fix that.

“More than just building technical standards but building customer experience.”

Read more: Zopa launches income verification tool using Open Banking data

Open Banking was launched in January this year to great fanfare, mandating the UK’s largest banks to share anonymised customer data with approved third parties, with the aim of increasing competition and innovation in financial services.

However, progress has been slow. Just four out of the nine largest banks were able to meet the 13 January deadline to comply with the regulations.

Gulamhuseinwala highlighted next March as a pivotal moment in the development of Open Banking, as all of the largest banks are set to roll out the next phrase of the initiative, which he said would be more “customer friendly”.

“Infrastructure will move on to mobile,” he said.

“Customers will be able to interact with Open Banking in a very quick, seamless and frictionless way, using mobile phones for authentification.”

This will make Open Banking far more accessible than expecting consumers to use banks’ desktop versions of their websites, he explained.

Read more: Lending Works unveils Open Banking partner

“2019 is going to be the year that we realise the full potential of Open Banking,” he said.

“I think there has been a change in sentiment and the large incumbent banks are really getting behind it.

“We’re seeing that more and more, with the banks themselves launching their own products, albeit starting with basic aggregator products.”

Gulamhuseinwala said that he wanted Open Banking to become “socially acceptable” and that high street banks “can really help with familiarity”.

Read more: Open Banking could provide £1bn boost for UK economy

He also said that peer-to-peer lenders could benefit from Open Banking. Speaking on the sidelines of the conference, he told Peer2Peer Finance News that the initiative could benefit P2P in terms of onboarding and continued assessment of loans after the underwriting process.

For example, this could help P2P lenders evaluate whether loans need restructuring or if borrowers should be offered another facility, he said.

He added that Open Banking could also offer benefits on the investor side, to help assess whether consumers are knowledgeable or qualified enough to invest in the sector.