Open Banking success

It’s in the journey

Open Banking provides a new layer of insight to assess customers for vulnerability and commercial risk.

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What are the benefits of Open Banking?

For businesses that need to gain an understanding of customer financial circumstances, Open Banking offers an exciting new way of retrieving this data quickly and cheaply.  Open Banking offers:

  • Confirmation of income and expenditure
  • Identification of potential vulnerability factors
  • Establishing eligibility for services – (e.g. existing welfare payments)

OB can revolutionise customer experience, making application journeys faster and more convenient.  It can transform operational overheads by digitising processes, thus reducing human intervention.  It can enrich insight, allowing for a deeper customer understanding and financial product tailoring that accounts for potential vulnerability.

More than 2.5 million UK consumers and businesses now use OB-enabled products to manage their finances, access credit and make payments. Openbanking

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What are the challenges of Open Banking?

Challenge 1 – Customer adoption

Open Banking is at the start of the journey to mass adoption.  After years of being told to never share their bank details, customers are now being asked to do exactly that.  As ever, there will be early adopters who are comfortable with sharing data, and those who resist.  A firm that mandates using OB must either be confident that their customers are an early-adopting segment or accept that it may be a barrier for many customers that impacts conversation.

Solution

Have an alternative route should customers fail to engage with Open Banking, but that doesn’t distract from it being the primary option.

Challenge 2 – Keeping the journey simple

Desktop OB journeys demand customers log into their bank accounts through a browser.  Not only is it more impractical, it also feels less secure. If necessary, a desktop application journey should move the customer to their mobile device for the OB element.

Solution

Mobile OB journeys provide a more customer-friendly experience. Gathering data from the customer’s mobile banking app makes the process simple and feel less intrusive.  It’s best practice to encourage customers to complete OB journeys on a mobile device.

Challenge 3 - Retaining engagement

Open banking data provides a three-month snapshot of a customer’s financial circumstances.  Continual insight requires regular engagement and consent.  While the regulations are changing to improve consent retention, it remains a challenge for firms to have an ongoing OB relationship with their customers.

Solution

Firstly establish a clear benefit to the customer of why providing ongoing access to their banking data adds value for them.  Secondly, make the process of reconfirming consent one that allows the customer to proceed with confidence and ease.

Challenge 4 – Learning real-time lessons

Classic credit data allows firms to use past (retro) data to build initial analytical models and customer insight prior to the customer’s first engagement. Since retro data doesn’t exist in Open Banking, lessons have to be learnt with live customers.  Establishing optimum deployment to ensure relevant insight for each customer whilst not compromising conversion is challenging.

Solution

Best practice is to adopt a Marginal Gains philosophy to Open Banking.  ‘Test and learn’ strategies must be deployed to continuously improve customer engagement and outcomes.

Challenge 5 – Building the journey

Adapting Open Banking into a ‘one size fits all” coded journey is difficult.  With multiple complex integrations that need handling, it will need considerable refinement as more lessons are learnt, demanding continual dev-test-release cycles.  In a world where IT backlogs have more demands than resources can deliver, this additional consumption of IT resources can be hard to accommodate.

Solution

For best results, Open Banking journeys must be orchestrated, not coded.  They must be easily adaptable by non-IT people without coding skills. This is where the PrinSIX platform comes in. Our software allows the ideas people to be in charge of building and customising OB journeys.

How we can help

We enable organisations to create dynamic, personalised, agile customer onboarding journeys with the help of Open Banking.

Our software equips lenders and other financial service providers to deliver the best possible customer experience in their application process, minimizing overheads and regulatory risk. It improves onboarding UX, helps with KYC and AML checks and meets the needs of lenders, regulators, and customers fully and simultaneously.

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Discover how to fully leverage Open Banking in your business

Book a call with PrinSIX CEO, Julian Graham-Rack to discuss how to overcome the challenges of leveraging OB. Previously the CEO of a UK lending provider, he is a recognised subject-matter expert on lending methods and tools.

Book a call