The potential of Open Banking remains “largely untapped” and platforms have the capacity to address the unmet needs of SMEs, according to an industry expert.
Robert McKechnie, senior manager at information solutions company Equifax UK, has predicted that Open Banking will be at the forefront of the fight against financial fraud in 2020.
“Open Banking, which was brought into inception two years ago, was predicted by many to spark a revolution in consumer finance,” said Robert.
“However, its full potential remains largely untapped.
“Two of the main pain points for start-ups and would-be entrepreneurs are access to credit and inflexible payment plans.
“Open Banking solutions now exist that can overcome these obstacles, supporting businesses with thin files by, for example, drawing upon personal finance history.
“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.”
Open Banking solutions are on course to fully digitise and streamline the credit application, consent and verification processes within the mortgage, insurance, automotive and utilities spaces, according to Robert.
“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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