A headshot photograph of Faith Reynolds, Independent Consumer Adviser to the Open Banking Implementation EntityConsumer lending with open banking: much more than taking credit

Faith Reynolds, Independent Consumer Representative to the OBIE, shares her thoughts on the potential of open banking to transform consumer lending – and how to accelerate it.

Click here to register for the 1 hour webinar on this topic.

 

From a consumer’s perspective, applying for a loan can be fraught with anxiety, confusing, and complicated. Sometimes the reason for the loan itself drives worry and this can be exacerbated by the risk of rejection or just being ripped off. The process can be alienating: a dense marketplace full of jargon and %APRs, long applications and salesmen demanding to know your budget. It can be hard to know exactly when the money will arrive, what the repayments will be and what the overall impact of taking out the loan might be down the line. And who knows how you’ll be treated if a product you bought on credit fails or you fall behind on repayments.

So how can open banking help? At the next OBIE Consumer Forum on 8th October at 1pm, II’ll be joined by an expert panel to discuss how open banking is re-shaping the credit market. We’ll be hearing from Fair For You, HSBC, Equifax and Portify about open banking’s potential to increase access to affordable credit, avoid unhelpful friction, manage borrowing effectively, and defend against poor outcomes. And, if open banking is a good thing for Consumers – how can the market help build trustworthy open banking-enabled products that are worthy of consumer adoption?

Open banking is already being used in different ways by lenders. Our panel will be talking us through its impact on responsible lending, creating flexible, responsive services, and helping to manage the impact of Covid 19.

Supporting responsible lending
Improving the accuracy of affordability checks, based on data beyond just credit scores, is in-market already. How effective is open banking data in affordability checks? What are the opportunities of drawing directly from the open banking data well – rather than supplementing consumer provided data, bank statements or bureau data?

Creating flexible, responsive services
How can open banking support faster decisioning? What tools are there, or could there be, to support lenders so they can be proactive in identifying vulnerability or pre-emptively engaging with consumers to work through difficulties collaboratively? And what are the drawbacks – is this too much like ‘big brother’ in action?

Managing the impact of Covid
How can open banking support consumers stay on top of their repayments, seek out breathing space or access payment holidays when they need it? What does open banking mean within the context of loan consolidation? If consumers do end up falling behind on repayments, how can open banking support them in catching up?

Open banking is already impacting customer journeys and user experience – is now the time to bring that innovation into the heart of credit in the UK, for both lenders and borrowers? From 1pm on the 8th October, we’ll be discussing what works well today, what doesn’t, where are the challenges, and what opportunities are out there for open banking to deliver genuine value for consumers.

We hope you can join us.