OPEN Banking will see a surge in popularity in the year ahead, according to expert predictions.
Ahead of the one-year anniversary of Open Banking on 13 January, consumer credit agency Equifax has predicted that 2019 will be “a successful year” for the initiative, as both banks and consumers realise its benefits.
Jake Ranson, banking and financial institutions expert at Equifax UK, said that he expects Open Banking to “play a central role in the banking sector in the years ahead”. This is despite the slow uptake which marred the introduction of Open Banking at the start of its inaugural year.
“We envisage services going beyond banking data, for example encompassing social media information so consumers can manage their data in one place to gain easier access to tailored services,” said Ranson.
“Open Banking also has the potential to play a key role when it comes to addressing problems such as persistent debt.
“Open Banking data greatly enhances companies’ level of understanding of individuals’ financial circumstances, enabling them to better assess their suitability for lending products,” he added.
“For those individuals with thin credit files, for instance, someone relatively new to the country or the self-employed, Open Banking data can be harnessed to get a more accurate view of their capacity to repay credit. The fusion of credit reference agency data and granular transactional data is likely to build the best picture of affordability.”
According to the latest figures from the Open Banking Implementation Entity (OBIE) Open Banking technology was used 17.5m times in November last year, up from 13.9m in October and just 6.5m in September.
“Today, we have over 100 regulated entities enrolled in Open Banking with in excess of 100 waiting to join,” said Imran Gulamhuseinwala OBE, trustee of the OBIE.
“With the line of sight we have into the Open Banking “pipeline”, this is going to considerably ramp up in 2019.”
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