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23rd March 2021

Equifax says Open Banking proving pivotal to pandemic lending

One year on from the official UK government lockdown, Emma Steeley of AccountScore and Dan Weaver at Equifax UK, laud the role of Open Banking in driving the credit market, and call for lenders to further embrace the rising tide of technological progress:

Steeley, CEO of AccountScore, an Equifax company says: “Since the first UK lockdown last March, we’ve seen a 140% surge in the adoption of Open Banking across the board. Facing an unprecedented challenge, commercial and consumer lenders have accelerated their digital transformation, embracing Open Banking. This is allowing credit providers to make more informed and timely decisions utilising real-time current account data, and ultimately helping thousands of businesses and individuals access billions of pounds of credit at a time of critical need.

“With income shocks, rising unemployment and personal debt forecasted as government support unwinds, the financial landscape for consumers and businesses remains uncertain. Open Banking will have a vital role to play in this volatile environment, not only in assessing true affordability at the point of credit application but in identifying when consumers are becoming more financially vulnerable and fast tracking tailored support to get to the right outcome.”

Weaver, Open Banking Expert at Equifax UK, adds “Lenders must harness this moment of transformative change, and not let inertia stifle innovation. Take mortgage applications for example, real-time digital access to bank account information can be used to support ID verification, and provide an enhanced view of credit risk. This process, through in-depth categorisation, can incorporate rental and other important payments to understand complex income cases and provide a more accurate view of affordability than the statistical survey averages typically used today. The mortgage market is extremely complex, but through wholesale collaboration with FinTechs, brokers and lenders, Open Banking solutions can fully digitise applications-dramatically streamlining the process while making it safer, fairer, quicker and less susceptible to fraud.

Faced by the pandemic, society has achieved near miraculous feats of ingenuity in embracing new technology and ways of working. As we mark a year since lockdown, we in financial services should be looking to speed up innovation, not slow it down. Given the right platform, Open Banking can greatly improve financial services, helping achieve a harmonious melding of smart automation with human interaction and intervention, while making feats such as ‘instant mortgages’ a future reality.”

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