In review: Open Banking Expo

We were delighted to be part of the inaugural Open Banking Expo which took place in London this week, with a packed agenda aimed at helping businesses seize opportunities, mitigate risks and deliver a positive customer experience.

With an impressive line-up of speakers and exhibitors, plus a host of visitors from across multiple business sectors, the various panels and forums examined the impact to date of the Open Banking initiative. One recurring theme was how we can increase adoption rates, with much discussion about the need to raise consumer awareness – and for that to be tackled at an industry level in order to gain the traction needed.

In the ‘Global spotlight’ session, senior executives from various industries looked at the opportunities for Open Banking not only in the UK and Europe, but globally, with an interesting case study from Mexico. With its very different financial ecosystem, the sharing of the data goes beyond the banks to a much wider net of data providers – highlighting the worldwide potential for the principles of Open Banking. It was clear, however, in each of these sessions, that the UK is regarded as the leading light in this particular data revolution, with the eyes of the world firmly watching our progress.

Other themes discussed during the event included how Open Banking could be harnessed to help vulnerable customers, with a look at the potential power of its use within collections. Typically those experiencing financial difficulty are the ones who will be frequently asked to produce income and expenditure statements, which can prove difficult and extend the review process longer than necessary. As one attendee pointed out, the level of data which Open Banking provides has the power to “help people with multiple debts to get to a resolution quicker.”

Over on the main stage, David Firth, our head of product for TransUnion Open Banking, looked at how Open Banking is transforming credit referencing, thanks to powerful new insight that offers a more granular level of detail to complement traditional credit reference data. David talked about the value exchange that comes with consumer consent and looked at the benefits for both business and consumers, as well as from a regulatory perspective.

David also shared a sneak preview of our research, conducted in partnership with Forrester, which highlighted that businesses overwhelmingly recognise the value of Open Banking, but that one of the current barriers to widespread adoption is consumers’ concerns over data security, with fear of their data being stolen or sold given as the main reason for reluctance to provide consent.

In our roundtable debate which followed, Ben Thackwray, our principal consultant for Open Banking, examined the potential benefits in more depth, looking at the identification of specific granular data points, such as a consumer gambling debit transactions being used to predict loan outcomes, illustrated with insights from our extensive research and development work.

By identifying the presence of a consumer’s gambling debts and then further quantifying the type of gambling – ranging from the National Lottery to regular online casino gambling – lenders could easily identify risk and make an accurate and informed assessment. As the gaming industry faces up to the need for more responsible gambling, this kind of additional data will be invaluable to lenders to ensure they know – and can demonstrate – that credit has been provided responsibly.

Feedback from participants in the debate was that it was clear to see the benefits of Open Banking, but that it should be used in conjunction with the existing tools and data provided by credit reference agencies as a complementary addition, rather than being used in isolation, with the overall aim being seen as “getting the best outcome for the customer.”

The day ended with some future-gazing from co-chair Dr Louise Beaumont, looking at the current perception of ‘challengers’ and ‘disrupters’, assessing the power of the GAFAs (Google, Amazon, Facebook and Apple) and considering which organisations will be the winners in the world of “open, customer-owned and dynamic data.”

All in all, a fascinating day, which illustrated the many benefits that Open Banking can bring and how the industry can work together to overcome some of the challenges. We’re already looking forward to the FData Global conference in Edinburgh next week where there will be further debate on Open Banking.

Download our Open Banking white paper, based on our research with Forrester.