Mass adoption of Open Banking platforms expected in 2020

The broadening of Open Banking platforms will be a turning point in its drive to mass adoption in 2020, according to Equifax UK.

Speaking ahead of the two-year anniversary of its implementation on 13 January, Open Banking expert, Robert McKechnie, has suggested that Open Banking platforms have the capacity to address unmet needs of SMEs, provide better outcomes for those in problem debt, as well as lead the fight against financial fraud over the next twelve months.

McKechnie highlighted two challenges for start-ups and prospective entrepreneurs – access to credit, and inflexible payment plans – and he said Open Banking solutions now exist to overcome these obstacles.

“Open Banking, which was brought into inception two years ago, was predicted by many to spark a revolution in consumer finance,” McKechnie commented.

“Further development of such platforms will help align the needs of the vital SME sector with providers of finance, and allow firms to amplify their understanding of spending patterns and periodic stress-points.”

The Open Banking expert suggested that by leveraging the extra level of financial data provided, Open Banking solutions can also mitigate the risk of financial fraud.

McKechnie suggested Open Banking platforms can also help providers assist and recognise consumers who are showing unusual spending patterns.

He added: “For example, early intervention is possible when an existing customer exhibits signs of financial stress, such as regular use of an agreed overdraft facility or their bank account going into excess territory, which leads to better debt outcomes for financially vulnerable consumers.

“While the impact of Open Banking hasn’t been as immediate or as seismic as initially predicted, it has irrevocably shifted the banking and wider financial services landscape for the better, and must continue to develop and broaden in 2020.”

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