ZOPA’S early foray into Open Banking has already been successful, with over 50 per cent of its potential borrowers who need to verify their income embracing the new data-sharing initiative.
The peer-to-peer consumer lender launched an income verification tool in February that can automatically pull in data from the person’s bank, removing the need to upload documents manually.
Marie Steinthaler, Zopa’s head of new products, said that over 50 per cent of people who need to verify their income to take out a loan with Zopa are choosing to use the new function.
“That’s a big deal: even for a relatively modest benefit (in this case, not having to upload a PDF copy of a bank statement), consumers are more than willing to embrace novel technology to enjoy a more convenient, streamlined application process,” Steinthaler said in City AM on Wednesday.
“Convenience has a value. For us, it means we’ve drastically reduced the amount of time it takes for customers to verify their income, because we’ve been able to automate getting the information we need.”
The technology for Zopa’s income verification tool is provided by London fintech TrueLayer, which creates APIs for platforms to access data from financial services providers.
Zopa is one of just a few P2P lenders who have announced their plans to capitalise on Open Banking, which mandates the UK’s largest banks to share anonymised customer data with approved third parties.
Fellow P2P consumer lender Lending Works has partnered with credit reference start-up Credit Kudos to automate the process of applying for credit.
A recent study from accountancy firm PwC predicted that Open Banking could become a £7.2bn revenue opportunity by 2022, but warned that there is still work to do in terms of general awareness.