Open Banking could drive more credit applications

Over 40 per cent of UK adults would make use of Open Banking to apply for credit if it improved their chances of getting an offer, gave them access to better rates or made the application “faster and hassle free”.

Digital bank Zopa commissioned research among 2,000 UK adults, and found that despite the above, 80 per cent of consumers have never knowingly used Open Banking.

“This disconnect reveals a strong demand for the benefits that Open Banking can bring to customers, despite a lack of awareness of its underlying proposition,” said Zopa.

So far, Open Banking adoption has mainly been driven by the use of account aggregation services. Aggregation has a positive impact on customers, with 50 per cent in the research stating that viewing all their banking products in one place makes them feel “more secure”.

Zopa’s research found that Open Banking for access to credit could benefit up to 40 million active users by 2025.

Tim Waterman, chief commercial officer at Zopa, said: “We already use Open Banking verification to ease application journeys and to power tools like Borrowing Power, which help our customers improve their financial health.

“By using Open Banking to calculate credit eligibility we are helping thousands more customers access our credit products.”

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