I also touched upon the importance of the engagement process around tech solutions to ensure that they can work for every link in the property chain.
Let’s now dig a little deeper into an initiative which could really impact this chain.
Open Banking is an industry-wide change aimed at increasing competition throughout the financial services industry.
It works through legal standards that require the big UK banks to share, subject to customer approval, their data through application programme interfaces (APIs).
These APIs send data from the customer’s bank to approved third parties, who in turn can offer a range of products and services.
Major rollout in 2020
Open Banking provides an opportunity for lenders to innovate and compete.
It’s an issue which is high on the agenda of all mainstream lenders and, speaking from a Barclays perspective, we are fully committed to embracing the concept.
Our aim is to utilise this technology to enhance the ways in which our customers are managing their money and ensure they have access to the best services possible.
Lenders are in regular dialogue with the government and the regulator about how to make Open Banking more accessible.
We have a large delivery scheduled for 2020 which extends our sharing of information, with customer consent, around a broader set of products and payments beyond current accounts.
It’s difficult to say just how far down the line we currently are in the Open Banking journey, with research suggesting that public awareness is still growing.
The inevitable tipping point for Open Banking will come when customers are confident in the security of the service and when they see that it can save them time and money in practice; in terms of avoiding unnecessary fees, securing the best rates and providing tailored financial advice.
Broker impact
The impact on the intermediary market is also a tough one to fully predict, after all Open Banking is only in its second year of implementation and lenders are still learning from deliveries, launches, and enhancements across different areas of the business.
The mortgage transaction remains a complex beast, and the impact of Open Banking is not a process which can be introduced without due thought and process.
Meaning that this will not be a simple journey, even though the end goal is simplicity, and lenders will have to work closely with the intermediary community to ensure they have easy access to, and full faith in, the accuracy and security of the data being provided.
As ever, intermediaries will play a vital role in any mortgage-related transition, both in terms of making this work effectively and helping to educate their clients on the merits of Open Banking.
In order to do this, lenders need to be as transparent as possible with their plans and technology integrations when it comes to supporting intermediary partners and their clients every step of the way.
Learning, education and confidence will be the key to the successful integration of Open Banking in the mortgage market.
The full impact may not be seen for a while yet but it’s important that we continue talking openly and frankly about this topic in order to find the best routes in delivering a service which offers clients complete security and control over their data.
And it’s a journey which all links in the chain need to be following closely – so watch this space.
