This will be the year the full potential of Open Banking is realised, according to an expert at Equifax.

With a week to go until the second anniversary of Open Banking implementation on 13 January, Robert McKechnie, senior manager at Equifax, said that 2020 will mark a turning point for financial data sharing, as incumbents and challengers embark on mass adoption of apps and a services to meet rising consumer need.

“Open Banking, which was brought into inception two years ago, was predicted by many to spark a revolution in consumer finance. However, its full potential remains largely untapped,” McKechnie said.

“Open Banking platforms have the capacity to address unmet needs of SMEs, provide better outcomes for those in problem debt, and be at the forefront of the fight against financial fraud in 2020,” he continued, noting that current painpoints for many startups and aspiring entrepreneurs are access to credit and inflexible payment plans.

“Open Banking solutions now exist that can overcome these obstacles, supporting businesses with thin files by, for example, drawing upon personal finance history – further development of such platforms will help align the needs of the vital SME sector with providers of finance, and allow firms to amplify their understanding of spending patterns and periodic stress-points.”

He explained that the advantages of leveraging financial data through Open Banking included mitigating the risk of financial fraud, fully digitising and streamlining credit application, consent and verification processes within industries including mortgages, insurance, automotive and utilities.

McKenchie concluded: “While the impact of Open Banking hasn’t been as immediate or as seismic as initially predicted, it has irrevocably shifted the banking and wider financial services landscape for the better, and must continue to develop and broaden in 2020.”

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