A near-unanimous 99% of financial services organisations polled expect Open Banking to benefit their business. Over half (52%) believe that Open Banking will speed up their application or onboarding process, while 46% expect it to improve customer experience, according to a white paper by information solutions provider TransUnion (formerly Callcredit), one of the UK’s leading credit reference agencies.
Research conducted by Forrester Consulting on behalf of TransUnion showed that currently, over half of financial firms struggle in processing consumer applications. Key pain points include the costs and time associated with manual processing of data (56%) and customers taking too long to gather the relevant documents (50%)–both of which the new open banking model will address, while also improving the customer journey.
In fact, customer experience is cited as the key reason for financial firms to implement open banking, with 56% stating their organisations need to improve customer experience during applications. This is closely followed by both product innovation and keeping up with the competitive landscape (53%).
Will North, core credit director at TransUnion said: “Financial firms are not only facing competition from their traditional rivals but from a host of specialist lenders, with new players including tech giants and nimble fintechs. The latest entrants to the market bring agility and a sharp focus on customer service. To compete, financial services providers should be utilising data-derived insights to secure their customer base, improve their service and capitalise on their brand strength.
“In this competitive landscape, it’s unsurprising that customer experience is recognised as a top priority, and open banking is a key platform for delivering a smoother and faster customer journey.”
Reaping the rewards
Overall, there are a number of specific areas where financial services decision makers see potential for improvement in their customer relationships that will be enabled with the adoption of open banking.
North continued: “As well as the anticipated improvements in customer onboarding, our research showed that financial firms also expect open banking to deliver time and efficiency savings (49%) and improve their ability to cross-sell products (42%). Navigating these opportunities effectively is essential for firms in delivering a competitive service and to realise the business growth they’re looking for – the right support from trusted partners is where we come in to help them achieve that.”
The findings are part of TransUnion’s new white paper: The Evolution of Open Banking: Adoption, Benefits and Consent