Transforming the way people transact, borrow, invest and manage their money, Open Banking has become an increasingly proven way to augment the use of financial services and is a hot topic. But what exactly does it entail?
Open Banking Apps employ software utilising standardised APIs (tech talk for plug-n-play), whereby financial institutions, regulated by the FCA, are able to gather customers’ financial data to seamlessly deliver relevant services to them. Launched in 2018 in the UK, more than 3 million people and businesses are now using Open Banking-enabled Apps and services in their daily lives. At the current rate of growth, it is estimated that 60% of the UK population will use open banking by September 2023.
Stirring up a new generation of financial services, Open Banking has facilitated businesses to develop a range of products that enhance engagement, decrease costs and transform the entire customer experience. For consumers, the provision enables secure access to a bank account whilst documenting income and expense information, therefore simplifying money management. Revolutionising the way people use their accounts, Open Banking can reduce costs, reduce risks and improve the entire customer journey. It is fair to say, therefore that the benefits of open banking are plentiful.
- Financial insight Apps allow customers to aggregate the financial information from their numerous bank accounts and credit cards, analysing and categorising the expenditure, helping customers better understand their financial situation.
- Payments are made quickly, effortlessly and securely. Faster than making a conventional online payment, this is especially noteworthy when using a mobile. One off payments or recurring payments can all be made with bank-grade security and verification by fingerprint or face ID. Banking takes just moments!
- Lending is transformed by providing direct access to income and expenditure data. Customers benefit from improved accessibility of finance, quicker decision making, and better outcomes than previously available when lenders used just Credit Referencing data to make their lending decisions.
So how will SALT apply this tech for consumers to benefit?
This can be broken down into four key factors
Speed: By allowing SALT direct access to bank account transaction data, customers negate the need to upload supporting financial information, such as bank statements, speeding up the application process
Convenience: With just a few clicks of a button, customers can give consent to share their bank account transaction history during the application process, all from the palm of their hands
Clarity: Open Banking transaction data provides clear insight into the customers income and expenditure, meaning SALT can accurately assess the customers ability to repay any loan they decide to apply for, delivering better outcomes for customers
Streamlining: Customers will be able to set up their loan repayments without leaving the SALT App and, when required, make fast one off payments to ensure their accounts do not fall into arrears if a payment is missed
SALT will entirely simplify the often daunting and complex process of boat buying, harnessing certified Open Banking technology. Instead of hanging in the balance and waiting around, decision and processing times are vastly improved, alongside an entirely paperwork-free experience. This 24/7 service will deliver fast credit decisions with interactions and transactions between borrowers and boat dealers clear to all parties involved through the SALT Supplier Portal.
“Open Banking is changing the way people access financial services. Nobody boasts about the number of loans they’ve collected. People don’t want to buy loans, they want to buy boats! At SALT our aim is to seamlessly integrate the application for finance into the boat buying journey, what is known in the industry as Embedded Finance. We are at the beginning of our journey and the future is exciting!” Damien Shiells, CTO at SALT.
Learn more about how these other companies are delivering benefits to customers by integrating Open Banking into their propositions:
Plend – improving accessibility to credit for those largely excluded.
GoCardless – fast and convenient payments.
Kestrl – the Muslim Money App, helping you make better financial decisions.
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Please note: Salt, via its group company Salt Money Ltd (Company No. 14001838) has applied for full authorisation from the Financial Conduct Authority (“FCA”) to run a consumer credit provider under the ‘lending which is not limited’ permission. Salt does not currently offer any regulated or unregulated lending services until these permissions have been finalised.