Greater information transparency will give banks a better picture of credit risk
Trustpilot, the global leading online review platform, today announces a study finding Open Banking can unlock over £1bn in additional UK GDP on an annual basis, supporting approximately 17,000 new jobs for the UK economy. The findings are the result of a study undertaken by the Centre for Economics and Business Research (Cebr) into the economic impact of new Open Banking standards on the UK economy. However, research from Accenture recently found 69 per cent of people may not consent to share their banking data with third-parties, demonstrating the entire industry must work hard to earn consumer trust.
Open Banking is the UK initiative to implement requirements of the EU’s Payment Services Directive II, which came into force in January. New Open Banking standards for APIs provide access to consumer and SME banking information for third-party companies benefiting consumers with personalised offers whilst fostering greater competition in the market. Customers must provide their explicit consent before their data can be made open to other organisations.
Glenn Manoff, Senior Vice President at Trustpilot, commented “By giving customers the choice to provide their financial data to third parties, Open Banking is set to unleash significant innovation across UK financial services. The new standards will also increase competition and remove information barriers as a plethora of new fintech players access the data necessary to provide compelling new services.”
He continued: “However, as research from Accenture demonstrates the industry will need to work extremely hard for the £1bn annual GDP benefit to be fully realised by demonstrating that consumers can trust them with their banking data. At Trustpilot, we believe in the principle of openness for driving innovation and growth. In this new world, we expect the financial services sector to see a revolution in how it deals with customers. Whether you’re a multinational bank or a fintech start-up, open, honest and transparent customer feedback will be critical to competing and winning the trust of customers in this new competitive environment.“