• 55% of UK credit providers plan to implement Open Banking in 2021, with 93% of those businesses expecting to do so in the next 12 months 
• 4 million UK consumers and small businesses are already active users of Open Banking-enabled products
• Improved decision-making on credit risk as a result of better data insight is ranked as the top benefit of Open Banking, according to credit lenders

London, 12th October 2021 – Over half (55%) of UK credit providers plan to implement Open Banking in 2021, with 93% of those businesses expecting to do so in the next 12 months, according to the latest Open Banking Research Report by credit reference agency, Equifax. 

With the pandemic accelerating consumer adoption of new technologies, and more digital data available as a result, the rise of Open Banking has gone hand in hand with the digitalisation of the financial services sector. New data shows that the majority of consumers who have used Open Banking enabled products (80%) are willing to recommend them to friends and family, strengthening Equifax’s belief that it is only a matter of time before more businesses look to adopt the technology to keep up with customer demand.

The new consumer landscape 

With the nationwide offices and branches of many of the UK’s banks closed during the first lockdown, mandatory aspects of the credit lending process, such as ID verification and payment tools, were forced online. This required new forms of verification, powered by Open Banking. The technology has proved effective, and now the wider financial services industry is looking at new ways to integrate data into its decision-making processes.

Beyond digital adoption, consumers needs have also changed, with research finding that new customer profiles emerged over the past 18 months, including: those in debt needing support getting out of it, savers who need to know where to invest and save and borrowers, prompted by the ability to save. With more data, lenders are more able to offer insight driven solutions, improving the customer experience. 

Emma Steeley, CEO at AccountScore, an Equifax company commented: “Open Banking data analytics allows credit lenders to build a 360 perspective of a consumer's financial life, leading to more rigorous financial checks and therefore a fairer, more affordable journey for both lenders and consumers. Our research shows 47% of people worry every day about their finances, yet customer confidence can be built in the long-term with the knowledge that data is adding an extra layer of protection throughout.” 

Benefits to credit providers 

As well as benefits to consumers, Open Banking provides many benefits to lenders. Equifax currently has 180 live clients benefitting from the use of Open Banking with users able to leverage its real-time abilities to improve customer satisfaction and retention by providing control over their data and help to engage with third parties securely and seamlessly. The top ranked benefits of Open Banking according to research participants are: 

Rank and Reason

1: Improved decision-making on credit risk as a result of better data insight

2: Faster decision-making and reducing customer drop offs on customer

3: Removing manual processes

4: More detailed data for a better understanding of Covid-19 impact 

5: Improve access to thin file credit customers (increase acceptance rates) 

Implementation in 2021 

Open Banking is now a key strategic imperative, and over half (55%) of UK credit providers plan to implement Open Banking in 2021, with 19% of lenders planning to fast-track their implementation of Open Banking-enabled products because of Covid-19. 

The commercial impact of this development in the UK cannot be underestimated, with increased focus from the Financial Conduct Authority (FCA) on responsible lending within both traditional and new credit products. Widespread adoption of Open Banking aids accurate lending decisions through improved credit risk, enhanced collections and recoveries through automated income and expenditure assessments, and improves estimation and verification of income, to further protect the consumer and the credit provider alike.  

Emma Steeley continued: “Access to fast, accurate and up-to-date transactional data, via Open Banking, has enabled credit providers to understand the potential circumstances of their customers throughout the pandemic, and responsibly lend as a result.  

“Equifax has experienced more than a 300% increase in Open Banking adoption over the past 18 months, with providers who do not adapt at risk of lagging behind and overlooking the curve of digital innovation. Open Banking is undoubtedly a crucial part of the credit industry’s future.” 

NOTES TO EDITORS 

All statistics in the Equifax 2021 Open Banking Research Report whitepaper are sourced from the Equifax Open Banking Industry survey 2021, unless otherwise referenced. More than 100 respondents from across the financial services sector were surveyed between Jan and Mar 2021.

Equifax and AccountScore’s open banking services are powered by Consents Online Limited, which is registered with the Financial Conduct Authority under Payment Services Regulations 2017 for the provision of Payment Services.   

AccountScore Limited is a group company based in the UK. It is not an FCA regulated firm. 

OPEN BANKING WITH EQUIFAX: 

Equifax provides a complete Open Banking toolkit. Our suite of Open Banking solutions convert consented transaction data into actionable insights. Further information and how to book a demo can be found .