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Open Banking

Journalist: Jake Carter, Mortgage Introducer

ended 17. July 2023

Open Banking allows the user to share certain financial information, such as their balance and transaction history, with other financial providers or services.

How is Open Banking expanding?

What more is there to improve upon regarding Open Banking?

What impact is Open Banking having on the market?

What is the long-term potential impact of Open Banking on the market and how quickly is this likely to happen?

7 responses from the Newspage community

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Editor
Justin Moy
Managing Director at EHF Mortgages
The more the financial institutions talk together, we will see quicker & more accurate lending decisions. We have seen more mortgage lenders adopt and use Open Banking to approve mortgages with little or no supporting documentation, issuing offers within minutes, rather than weeks. This is not about the days of no financial checks, but the ability to check bank accounts for affordability, and other agencies to evidence declared income, in a few seconds, eliminating fraudulent documentation too.
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Chris Barry
Director at Thomas Legal
Open banking is providing a plethora of solutions for clients and those in professional services.

Clients are able to view savings and borrowing from different providers all in one place. This allows consumers to shop around for the best rates with the convenience of having them linked as if it was all in the same place.

From a professional services perspective, Open Banking allows a quick, easy and automated way to qualify source of funds. AML checks are becoming increasingly important at all stages of a property purchase and technology providers are using Open Banking to sweep all accounts held by a client and confirm where a clients funds have come from. This saves a tremendous amount of time for all involved as clients will no longer need to provide bank statements from different accounts.
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Joe Stallard
Director and Advisor at House and Holiday Home Mortgages
Open banking has increased 100% year on year apparently. And it's got some great buzzwords/phrases including 'transparency', 'real-time financials', and 'automated customer journey'. Essentially, customer data transference from banks to third party institutions sounds smooth and useful. Banking jazz... It's certainly got the potential to make clients' lives easier. When it comes to people with multiple bank statements from different banks, things could really speed up but... what about data protection? Moving huge amounts of information around rapidly means all the doors have to be open metaphorically. There's a concern, rightly, about ID fraud, and this has to be considered if making a choice to use open banking systems.
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Stuart Crispe
Founder at Sunny Avenue
Open Banking was supposed to increase competition and a few aggregators have popped up, such as Raisin, (for personal savings) but none for investment advice.

Many advisers only offer tied advice and until that changes, I can't see open banking taking off.
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Austyn Johnson
Founder at Mortgages For Actors
Less paperwork during a mortgage application will always be welcome, but for our compliance, we need these in downloaded or paper form anyway. I like the idea, but it needs to coincide with Network compliance too. It should essentially speed things up.
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Russell Maggs
Mortgage & Protection Adviser at Maggs Financial Services
It's great that mortgage lenders can use online banking to quickly and efficiently approve applications. But there needs to be more joined up thinking between them, the regulator and networks/DA firms to advance this technology.

Allowing open banking throughout the industry will improve consumer outcomes, reduce errors and improve the quality of mortgage business written. But mortgage advisers need to have the same information as mortgage lenders for it to work properly.
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Jonathan Burridge
Founding Adviser at We Are Money
There are sectors of the finance market such as vehicle finance and unsecured loans where Open Banking is being embraced is very successfully, providing fast decisions and no-fuss applications. There are a few mortgage lenders that embrace the technology, but, it could simplify and improve the efficiency of the advice process if more in the mortgage industry used it. Document gathering and also document due diligence can be enhanced by the use of Open Banking. Lenders could start to accept Open Bank as an alternative to "old fashioned" PDF statements, the same is true for Networks.