In fact, close to 10 per cent of digitally active HSBC UK customers are using Open Banking services, with the number growing all the time.
We have been looking at how we can integrate this fantastic technology protocol.
We have seen applications across current accounts and unsecured lending products, where it has made a real difference making life quicker, easier and safer.
And I am extremely excited to now see Open Banking being integrated into our mortgage process in a small but important way that will see the time it takes to go through the underwriting process being much reduced for self-employed applicants.
It will mean they don’t have to go through the hassle of digging out and wading through months’ worth of paperwork which would then need to be submitted either electronically or by post.
After all, as the famous business saying goes “time is money”, and who wants to be doing admin for a mortgage application when you can be running your business, or utilising that time with more fun pursuits?
Let Open Banking take the strain.
We are partnering with Experian on this initiative to speed up the mortgage process for self-employed customers.
The mortgage applicant must be with one of the twenty providers that allow data sharing, a list that, as you would expect in this day and age, includes all the big names and most popular providers.
Why are we doing it?
The simple answer is that it will make a positive difference.
The effects of Covid-19 have been seen far and wide, and literally everyone, self-employed or not, has been affected in some way, shape or form.
Each industry is different and each business within them is different. The landscape for many had changed significantly, so in some cases we needed to ask for a bit more information from self-employed customers to make sure we’re lending appropriately.
This had a knock-on effect whereby in some cases we needed to go back to the broker and ask for more information before completing an assessment. That added time to an application.
When that was done the case would be ready for review and of course with the extra information required, it naturally takes more time for an underwriter make a reasonable assessment of the application. Or it did.
Open Banking provides the customer and broker with a quicker and easier way of supplying business bank statements which eradicates errors and significantly speeds up our ability to assess what those bank statements are telling us.
When you have a scale business, assessing thousands of applications every week, every minute saved in manually wading through additional statements can then be re-invested in getting to the nub of the lending decision and speeding up the lending process overall.
We are very conscious of concerns about the access to information and Open Banking is a very closely regulated process.
But we recognise that customers and brokers alike will have some natural reservations while wider adoption of the technology becomes more the norm.
With the customer’s authorisation we only extract, retain and use the data that is required for this agreed purpose and no other data is held or used by HSBC.
Priority for Open Banking cases
The benefits of using Open Banking this way are easy to see and it is absolutely vital we all embrace this new technology as it clearly signposts the future of self-employed underwriting.
But it also has much wider practical applications to simplify the way we operate.
As an added incentive HSBC will prioritise those self-employed applications that use Open Banking to demonstrate affordability.
We’ll obviously have to wait and see how the take up of Open Banking for self-employed customers goes over the next few months.
However as the technology gains traction with customers and the benefits become plain to see, HSBC will continually assess how to widen its practical development across the business.