An open banking expert has predicted that more peer-to-peer lending platforms will implement the data sharing initiative this year, and the early adopters will start utilising it for more uses.
Emma Steeley, chief executive of Equifax’s AccountScore, said that over the last year in general take-up has improved and there has been a shift of lenders using open banking for more areas, such as for credit worthiness and income verification, complimenting credit reference agency data.
She said that take-up and the uses of open banking will continue to rise in the P2P lending sector.
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“I think we’ve definitely seen in the P2P sector open banking has grown in that area so I will have no doubt more platforms will be taking it on if not now then in very near future,” said Steeley.
“For the P2P lenders that were early adopters and keen to figure out how to utilise data, they are a few steps ahead in how to use that data in a meaningful way so that’s really exciting and for the P2P platforms that haven’t yet adopted it, you need to start soon.”
Steeley said she has seen a 300 per cent rise in utilisation between January 2020 and October 2021, and believes this uptake will continue.
“We’ve seen an acceleration in lenders moving up in the journey, for credit worthiness and income verification, complimenting credit reference agency data in terms of utilisation and finally brokers and aggregators are adopting open banking,” she said.
“We’ve seen a 300 per cent increase in utilisation since January 2020 to October this year, very much led by brokers. Enough lenders are using open banking and collecting data upfront and having that technology upfront, which is time efficient. I expect the rollout to continue throughout 2022.
“Take up will improve. In terms of where I see growth in utilisations, I’d expect it to double again next year in terms of the number of people sharing accounts, it may even grow faster than that.
“A lot of it depends on getting brokers and aggregators onboarded across the sector, something industry is actively working towards.”
Peer2Peer Finance News understands that several platforms are looking at implementing open banking.
Last month, Equifax found over half (55 per cent) of UK credit providers plan to implement open banking this year.