Open Banking Post-Pandemic Growth Driven by Digital Acceleration

TransUnion Open Banking data (summarised in the Consumer Credit 2022 white paper) shows financial institutions have been experiencing the highest volume of Open Banking transactions since PSD2 came into effect in 2018 — caused in part by banking having become more digitised during the pandemic.

Shail Deep, Chief Product Officer at TransUnion UK, commented: “We know the main drivers behind Open Banking usage are the ease and convenience of automated processes and the fact it’s quicker to get a decision on finance applications. Meanwhile, 47% of Open Banking users are motivated by not having to dig out old bank statements to open accounts.

“But Open Banking isn’t a standalone technology. It forms part of the consumer journey, and what UK consumers care most about is its role in providing a faster, friction-right experience, whether providers go out of their way to label it as Open Banking or not.”

Open Banking: Converting consumer awareness into action

Awareness of Open Banking among UK consumers is healthy: nearly 7 in 10 (68%) said they’ve heard of it when given a definition of the technology, and one in six among these (17%) said they’ve used Open Banking in the past. Gen Z consumers are the most positive about Open Banking; 42% said they’ve used it previously, while a further 32% haven’t used it but would be willing to do so.

Despite increased adoption, challenges among a minority of the population remain: one in five (21%) adults said whilst they know what Open Banking is, they aren’t willing to consent to it.

Getting consumers to try Open Banking for themselves is a key step to tackling this hesitation. Once people use Open Banking, they’re overwhelmingly likely to be positive about the experience; of those who’ve used it in the past, 93% would be likely to use it again in the future.

Open Banking gives finance providers a more detailed view of consumers’ current finances, thereby better enabling them to verify applicants without a credit history or who might have trouble getting credit altogether. The technology can also facilitate solutions that help consumers manage their money and adjust spending habits to better cope with inflationary and cost of living pressures.

Andy Piggott, Director of Core Credit at TransUnion UK, added: “Our research shows that the cost of living crisis makes it harder for people in the UK to improve their financial position. That said, swifter and smarter income verification processes can help navigate the storm. The TransUnion Open Banking Platform makes it easy to authenticate and onboard consumers in an intuitive and secure environment through a seamless screen flow. It helps people share their financial data to get access to sustainable and affordable credit products that are right for them.”

Learn more about TransUnion’s Open Banking platform including how we use transactional data and robust categorisation to enable better consumer lending journeys, our Open Banking api and our ambitious partnership with Bud to develop the next generation Open Banking solution.

Or read the Consumer Credit 2022 white paper from TransUnion.