Risk predictions for 2018 - #5: Growth of financial crime expected to continue
Risk predictions for 2018 - #3: Increase in stress testing requirements
Open Banking to level the playing field
31 January 2018
In our latest whitepaper, Seven risk predictions for 2018, we explore which trends lenders are most likely to adopt to protect themselves, consumers and the global economies, whilst also going back to the most important aspect of any business: profitability. Here's our fourth risk prediction...
#4: Open Banking to level the playing field
Open Banking will have a relatively slow start, but it has the potential to level the playing field between providers. This will result in a gradual shift towards new aggregated services and a marketplace of regulated providers who will offer appealing services to consumers based on their own banking data.
Interesting times lie ahead for lenders.
Established players face a challenge from innovative organisations targeting their customers using their own data. Customers may get used to using third party intermediaries; increasingly, they will bypass the use of individual lenders’ apps and websites, with the associated loss of marketing opportunities.
New providers will need to make best use of open data, but may face some modelling and assessment difficulties in the absence of outcome
data. What does this mean for the traditional credit reference agency? And let’s not forget that we now operate in a GDPR-compliant world in which permission is everything. Providers must ensure that customer data is being handled appropriately; it must be clear to the consumer who is the custodian of their data.
With much to consider, financial services providers should be thinking now about the implications of linking GDPR permissions to Open Banking data and using this to drive innovative product developments of their own.
To read all seven of our risk predictions, download our latest guide.