Is open banking making waves in P2P?
Open banking has a range of benefits for lenders, including for peer-to-peer lending platforms, and it has been more important than ever during the pandemic. But in the three years since it was introduced in January 2018 to great fanfare, is the data-sharing initiative really making waves within the sector?
Platforms can use open banking to better assess the affordability of borrowers by using real-time data rather than old bank statements. This also helps to reduce friction in their processes and offer an improved customer experience as well as quicker lending decisions. Open banking can also help to reduce fraud, such as through the confirmation of payees.
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Open finance stakeholders herald its potential but question data ethics
Open finance has the potential to greatly benefit consumers, but raises questions of data ethics, according to industry stakeholders surveyed by the City regulator. The Financial Conduct Authority (FCA) published a feedback statement today on its call for input on open finance. The term refers to the extension of open banking-like data sharing to a wider range of financial products, such as savings, investments, pensions and insurance
The FCA’s call for input launched in December 2019 and closed in October 2020, having received 169 responses from industry stakeholders regarding their views on open finance. Responses showed that open finance can increase access to a wider range of more individually tailored products, empower consumers and businesses to make more informed financial decisions and make it easier for consumers and businesses to compare price and product features and switch easier.
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