RATESETTER is trialling several partners to help it tap into the opportunities presented by Open Banking.
Michael Hoare (pictured), head of credit at the ‘big three’ peer-to-peer lender, said that the platform is working with “a couple of different” parties, as it looks to utilise Open Banking for application assessments and lending decisions.
“We are starting to dabble in Open Banking,” Hoare told Peer2Peer Finance News.
“You can’t just jump into it though. We will make a decision on our partner in the new year.”
Hoare said he expected more firms to develop products and services using Open Banking once aggregators such as MoneySupermarket begin to adopt the data-sharing initiative.
This would then feed into the products and platforms that users select through comparison websites, he added.
A number of P2P lenders have already started using Open Banking, which mandates banks to share anonymised customer data with approved third parties. Uptake has increased in recent months, as more application programming interfaces (APIs) have become available, making it easier to access data held by banks.
Additionally, business P2P lender Growth Street has launched an API that lets users access its GrowthLine product through the Starling Bank app.
A report earlier this year from accountancy firm PwC predicted that Open Banking could become a £7.2bn revenue opportunity by 2022, but said there is still work to do on boosting awareness among businesses and individuals.
“Open Banking is a potential game changer for individual and corporate consumers,” Jonathan Turner, financial services payments leader at PwC, said.
“It provides an opportunity to transform the public’s interaction and everyday experience with the financial services industry. But there are still many ‘hard yards’ to travel. Few disruptive propositions have been developed so far.”
Open Banking mirrors the EU’s Payment Services Directive II. Both sets of legislation aim to create more competition in the banking industry and encourage innovation.
Under the UK rules, the nine banks with the largest market share are required to adopt and maintain common API standards through which they will share data with other providers and third parties.
This article featured in the December issue of Peer2Peer Finance News, now available to read online.