Q3 2019

Wealth & Finance International - Q3 2019 21 New Research Identifies Three Factors Critical To Unlocking Open Banking Potential New research from the UK’s number one credit checking service ClearScore, and its industry partners shows that open banking will only improve consumers’ financial wellbeing when financial service providers focus on highlighting the key benefits of open banking to people and how sharing their data could improve their financial well-being. The latest research on open banking indicates that once consumers had a clear grasp of the practical applications of open banking, there was a positive shift in their attitudes. UK fintech ClearScore tested a range of product propositions to obtain a better understanding of what services resonate with consumers the most and ultimately lead to them sharing their data in return. 1. Bill recognition - regular bill payments recognised as contributing to your credit score, giving lenders extra proof of reliability. This solution was another one of the most popular with over 81% willing to share their data. 2. A clearer picture – a more accurate credit score and view of their financial situation. There are currently 760,000 people who are underserved by the market who could benefit from a service like this. Over 83% stated they would share their data for this offering. 3. Getting accepted for credit - 76% of people said they would be happy to share their data if lenders could view more information about their finances to get a fuller picture about whether to offer them credit. In addition, the research shows that consumers’ likelihood to adopt open banking-enabled services increases by 50% with trust marks in place from their bank or lender before submitting their banking details. These could include FCA approval, user testimonials or third party reviews. More than 18 months since the UK’s open banking initiative launched, an overwhelming three-quarters of consumers are still unaware of it, so inspiring confidence in the scheme through trust marks could prove instrumental to driving adoption. Serving the underserved The research also reveals a difference in perceptions towards open banking between consumers who have wide access to financial products and those who don’t. By enabling consumers to provide more nuanced information to a financial institution, those who currently have less access to credit could stand to benefit most from new innovations. ClearScore is launching a raft of innovations in 2019 to introduce the tangible benefits of open banking to its 8m UK users in a way that is calm, clear, and easy to understand. • OneScore: Launching initially to the 500,000 users who are actively preparing or thinking about the dream of owning their own home, OneScore will integrate open banking data to help users understand how they should change and improve their financial position to move towards their dream home. • Offers boost with open banking: ClearScore will give users who are currently underserved by the market the opportunity to connect their bank account data to their ClearScore accounts. With their explicit permission, this data will be shared with ClearScore’s lending partners to see if the additional bank account data provides the consumer with improved credit options. • All in your ClearScore: ClearScore will enable all users to link their bank account data to their report section, providing them with the most comprehensive view of their finances possible, combining their credit report and bank account data all in one convenient place. Justin Basini, CEO and co-founder of ClearScore, said; “Open banking has huge potential to give consumers better control over their finances, especially those who have limited access to financial products. But unless the industry does more to explain the tangible benefits to consumers and create real products that make a difference, consumers will be the ones to miss out. That’s why we’ve committed to developing new innovations such as OneScore. We are working with our partners to turn the vague benefits of open banking into real products that can help everyone to improve their financial wellbeing, no matter what their circumstances.” Readers can download the full report, Why the Time is Now , here.