fbpx

Chatbots and open banking: the next step for lenders

Don’t get left behind. Find out why lenders and loan brokers should know about chatbots and open banking.

Financial technology (fintech) is developing at a rapid pace. Customers want quicker, more convenient interactions with lenders. Lenders and loan brokers want technology that will meet those demands and drive business efficiencies.

Businesses that don’t keep up with the latest trends in fintech risk appearing outdated. Most people don’t want to meet their lender in-person anymore. These days, 7 out to 10 people use computers and mobile devices for banking. People want to apply for loans anywhere and at any time. Smart lenders are using this trend to their advantage. Their customers can access their products whenever it’s convenient for them to do so, thanks to fintech.

Advances in messaging software, in particular, have revolutionised customers’ expectations. According to a recent worldwide survey by Statista20% of people want to use chatbots for banking or financial advice. If their bank can’t offer chat automation, there are plenty of others that will. 30% of large financial institutions are investing in artificial intelligence.

Innovators within the financial sector aren’t settling for a simple chatbot. They are looking at how AI can combine with the latest major disruption, open banking, to enhance the customer experience. Find out why chatbots and opening banking is the next step for the lending industry.


Never miss a lead


24/7 access to banking services was the second most important factor for customer retention in a recent study. Lenders that want to remain competitive use chatbots to provide customers with round the clock customer service. Using an AI powered chatbox on their websites also ensures that they never miss a new business lead.

Advances in AI and computer linguistics have helped to boost the adoption of chat automation. Chatbots can mimic human interactions and improve over time through machine learning. This makes them well-suited to carrying out customer service tasks. Large enterprises looking to reduce operating costs are driving industry growth. By 2025, the global chatbot market is set to reach $1.25 billion.

In the lending industry, chatbots are being used to collect new business leads outside of normal working hours. Automated chat templates can collect loan applicants’ names and addresses at any time of the day or night. It doesn’t have to stop there; you can collect as much or as little information as you need. Chat templates can be tailored to your business. Smaller lenders or brokerages can use chatbots to upscale their new business strategy without needing to hire extra staff.

Ibby’s workflow automation tools will save customer contact details to your CMS and set-up tasks and reminders to help your team nurture leads. It will also send out automated emails once a visitor submits a loan application. Why is this important? Timely customer communications can help build trust, satisfaction, and loyalty.


Qualify leads with chatbots and open banking


Traditional lenders cannot afford to be complacent. Competition from digital-first fintech companies is eating into their market share. Fintech companies make up 38% of the personal loan market in the US. Five years ago, digital start-ups only had 5% of the loan market.

Traditional banks and credit unions can learn from fintech companies if they want to thrive in today’s digital era. US banks’ share of the loan market dropped by 20% from 40% in 5 years and credit unions’ share dropped 21% from 31% in the same period. Most fintech companies are at the forefront of emerging technology in the financial sector. They use or develop digital tools that are pushing the boundaries of customer experience. They are finding ways to make applying for a loan faster and more convenient. Customers can access their services whether they are at home or on the go, as long as they have an internet connection.

Traditional lenders that are not willing to change their business model may struggle to compete. Consumers’ appetite for digital-first loan providers may impact even the largest market incumbents.

Many fintech companies recognise what open banking can do for their business model. Individuals can give software permission to access their financial data automatically. The impact this has on streamlining the loan application process and making it more convenient cannot be underestimated.

Individuals don’t have to submit proof of their financial history manually anymore. Now, fintech can fully automate the process. In just a few taps, lenders can run financial checks on behalf of applicants. Loan brokers can immediately see what products a person is likely to be accepted for. Automating this part of the loan process makes it less daunting and time-consuming for individuals. The result? People are less likely to abandon the application process and lenders may see an increase in successful applicants.

Ibby can help businesses to drive efficiency by combining the benefits of open banking with its chat automation tools. Before applicants even reach an advisor, Ibby’s chatbot technology will use open banking to conduct credit checks and assess applicants’ eligibility. Sending your advisors pre-qualified leads only will free up time so they can focus on converting leads into customers.


Get personal with customers


In a recent study, 64% of lenders claimed they are worried about losing customers to emerging technology companies. Competition for customers is fiercer than ever before. Emerging challenger banks are taking market share from traditional lenders, and customers can easily switch providers if they are offered a better deal elsewhere. Financial institutions are turning to fintech to help them hold on to their customers. In the same research, customer experience and technological innovation emerged as being very important for customer retention.

Fintech can make it possible for lenders to offer a personalised service which is essential if they want to improve the customer experience. New technologies make it possible to gather an unprecedented amount of customer data now. Companies that can turn this information into insights will be able to stand out from the competition. 74% of professionals plan to invest in data analytics tools so they can keep track of customer trends.

Loan brokers, in particular, need customer data to provide tailored advice. It isn’t enough to only know top-level facts about your customers anymore. People using a brokerage service want their advisor to understand their circumstances and future needs. If they can’t deliver this, customers may decide to go direct to lenders or try a Robo-advisor.

Before they can analyse customer data, lenders and brokers need to collect it. That’s where chatbots and open banking comes in. When used together, it can create an in-depth picture of individuals’ financial circumstances. This data can be mined to identify trends in customers’ lifestyles and financial needs. It will give lenders and brokers the context they need to understand what customers want and why they want it. With this knowledge, they can provide better product recommendations and create bespoke offers.

Ibby will make it easy to store customer data and act on insights. Its CMS software saves customer interactions with chatbots, making it easy for advisors to access the information when they need it. These insights will be combined with data from all other customer touchpoints to build a full picture of every individual using your service. This can be used to drive your marketing efforts, develop your business offering, or automate personalised messages sent at key times in the customer lifecycle.

Get started for free!



SHARE THIS PAGE:

Using AI and machine learning to transform CX in financial services

Customer experience (CX) is key when it comes to digitalisation of services in the financial sector, and AI can provide the means to master it. Find out what today’s technology has to offer

The journey for companies in the financial services sector, as they take the path to digitalisation, has come a long way from the Internet of things to the latest automated systems and mobile integration – and taking now the next crucial steps towards intelligent automation.

Financial companies are increasingly turning to fintech startups and innovative tools that can open the doors to digital transformation, to revolutionise the customer experience. A positive customer experience can not only power lead generation and sales, but it’s a fundamental driver of customer loyalty and retention for companies. Businesses are realising that enhancing the customer journey and experience undoubtedly brings long-lasting benefits, but in order to get there, investment is essential.

First things first – what is customer experience?

Customer experience involves strategic initiatives that focus on creating a competitive advantage for businesses, by delivering optimal experiences to customers.

In a new global study by Walker analysing the future of B2B customer experience, companies were asked where they were investing to meet the changing needs of customers. The results showed that 62% are investing in understanding individual customer characteristics, while 58% are investing on simplifying processes. For businesses operating in financial services, Artificial learning (AI) and machine learning are providing tools to help in both these areas, which are major factors that can result in poor or positive customer experience.

In the world of Artifical intelligence (AI) and machine learning, the opportunities have only started to unfold, especially with chatbots and automations. But the tools are advancing quickly and at a steady pace; development does not rest, and the implementation that can be seen across the range of financial services is showing an incredible potential to forever change the way consumers interact with institutions.


How is the financial sector embracing AI?


The goal is to win over the digital natives, which are now making an incredibly large portion of the population. These consumers are tech-savvy and expect high-end customer experience. Banks, financial institutions and firms operating in the wider financial space are embracing new technology solutions and disruptive innovation for improving efficiencies in areas that range from customer support, to data and insight analysis, personal loans, insurance, and overall financial business performance.

AI tools are being harnessed by professionals in the financial services industry to gain the edge in customer intelligence. Fintech solutions that incorporate open banking, for instance, can enable firms to access individuals’ financial data, to create an accurate picture of their financial circumstances and deliver better tailored products and solutions. This technology is particularly useful for lenders and loan brokers, who are able to use open banking to assess affordability and determine customer’s eligibility for specific products.

Machine learning is also experiencing fast development and implementation. Chatbots are becoming more clever and capable, and one industry where they are really making an impact is financial advice. Also known as robo-advisors in the industry, chat automation is helping advisors to better understand customer preferences and deliver tailored advice – which also leads to better customer experience and builds up meaningful relationships.

With the help of automation and integrated AI, banks and financial institutions are becoming technologically sophisticated, advancing in their capability to attain customer insights and deliver a more personalised service. Beyond advisory, businesses are making the most of these tools for enhancing financial risk assessment and decisions, conducting accurate credit checks, pulling bank statements and even anti-money laundering reports.

At this stage, there’s much room to explore, and the market trends are showing that modern financial companies are keen on adopting new solutions to stand out from the competition. A significant 30% of large financial institutions are investing in artificial intelligence.

Here’s a few insightful statistics about the state of AI, machine learning and the financial services industry:

  • 70% of financial institutions are using machine learning (Deloitte insights). The uses range from predicting cash-flow events, proactively advising customers on spending and saving habits, building advanced credit models, detecting patterns in transactions, identifying fraudulent transactions and more.
  • 13% of financial firms said they have implemented AI technology to increase worker productivity (Narrative Science)
  • 80% of financial institutions perceive chatbots as an opportunity (Personetics)
  • 58% of financial advise firms said they would implement new technologies in 2019, with 38% investing in tech to scale and serve more clients (Schwab)


Conclusions & recommendations


Today’s technology has much to offer and much more to come, and it’s up to the most forward-thinking companies to make the most of it in order to meet the demands and expectations of digitally savvy customers.

Easier said than done? As challenging as it may look, partnerships with fintech startups represent great opportunities for companies operating in financial services. Ibby offers the latest advances in fintech including chatbots, instant messaging automation, co-browsing, workflows and open banking, to transform customer experience and help financial brands to scale.

Get started with Ibby for free, and discover how easy it can be to bring your business to the true digital era.


SHARE THIS PAGE:

Open Banking: Customer intelligence for financial services

Customer intelligence has become one of the forces disrupting the competitive landscape of financial services.

In the midst of change and transformation driven by the PSD2 legislation, the financial services industry is discovering the true potential of Open Banking. With the ability to connect directly to consumers’ banks, as a secure way to access financial information, one of the clear advantages that the innovative technology poses for those embracing it is customer intelligence.

Customer intelligence consists of collecting data from consumers and utilising the insights to find the best possible ways to serve them. No matter what industry your business operates in, consumer data is key for companies to understand the needs of their audience, and to get a solid grip for developing strategies that can truly respond to their customers’ needs.

In the financial services sector, harnessing consumer data with accuracy is becoming essential in order for companies to deliver products and services that are personalised. A study by PWC analysing financial services technology and their impact, concluded:

“Customer Intelligence will be the most important predictor of revenue growth and profitability”.

Technology has for years been used to improve efficiency and to optimise costs – but the benefits are going beyond that. The latest advances, including Open Banking tools, are being developed to support legacy systems and complement traditional processes. Rather than a threat, it’s an opportunity: financial institutions are increasingly seeking partnerships with fintech startups that can help to catapult their operations to become more customer-intelligent businesses that offer more customer-friendly solutions.


Mastering customer-intelligence with Open Banking


Industry players in the financial sector are now trying to keep track of all the innovation and competition driving the market. The time is right for understanding the opportunities that Open Banking capabilities present, to adopt the technology and add it to the mix of tactics to master customer-intelligence.

Companies are putting their efforts on collecting data about consumers in order to understand them; this includes online habits, spending preferences, where they shop or what they buy, etc. But what about their financial information? It used to be the case that banks held up much of this information, and getting an accurate picture of individuals’ financial circumstances was a challenge; but Open Banking is changing this.

Understanding individuals’ financial circumstances is incredibly important for businesses operating in financial services, especially for those in lending and financial advice; in order to deliver the best solutions. Open Banking technology is now facilitating the collection of this financial data, for the benefit of both business and the end user.

For consumer intelligence to be effective, however, it’s essential to know that collecting data isn’t enough. The insights that are gathered from customers need to be analysed and processed in a way that allows businesses to drive development and strategies that resonate with their audience. Fortunately, AI and machine learning, are stepping in to take the weight off your shoulders. Some of the latest tools that incorporate Open Banking come with advanced features like spending categorisation, to help you make sense of the financial data that is gathered from consumers.

Open Banking allows people to share access to their financial data with regulated (or industry-approved) third parties providers. Whilst enabling access to individuals’ financial data-sharing in a secure way, it also gives customers control over their data. It’s a method that is much safer than previous ways of data-sharing, especially because of PSD2 legislation and regulations that are in place to subject the data to strong security and encryption practices.

PSD2 requires that banks and financial institutions go through strong processes for customer authentication, consent and reliability – leading to GDPR and, more recently, Open Banking. After the first six months of the initiative coming into force in the UK, findings by PwC and the Open Data Institute showed that by 2022 the market could be generating as much as £7.2 billion in value.


What kind of information can be attained with Open Banking?


When establishing a direct link to an individual’s bank, the technology can look into a specific bank account or credit card, for instance. It can then report back to the Account Service Information Provider (AISP) with extracted data on transactions and spending, income, bank statements, credit history. Because of the connection that is made to cross data between the individual and the bank, more can be achieved in terms of verifying ID and authenticating security details, which means Open Banking can also assist in anti-money laundering procedures.

The real customer intelligence trick happens when AI is able to follow up by categorising spending and flagging transactions, to help agents in financial services to assess affordability of individuals more efficiently and accurately.


The importance of capturing data in real-time


One of the key factors in achieving customer intelligence success is the ability to capture customer insights in real-time – this ensure relevance of the data, and can be a resource for a business to understand easier their customers and what works best for them.

Does this sound easier said than done? The truth is that automation and messaging technology has made great steps in gathering data in real-time and processing insights for effective follow-up, so it doesn’t have to be a laborious task.

In Ibby, for instance, we are combining the power of live chat and chat automations with Open Banking functionality. Our solution allows companies to engage in conversation with visitors and customers in real-time, in an instant messaging environment. Customers can share financial data in a secure way and when it is appropriate while chatting to agents, and share their contact details so that these can be saved into a smart CRM system, that can then trigger relevant messages at further stages of the funnel. The process of gathering data this way is real-time, smooth and painless.

Ibby can make the process of collecting bank statements simpler by allowing authentication through the individuals’ banking apps on any device, via live chat. In many cases, this involves the slickest authentication steps such as face recognition and finger-print technology, reducing friction and enhancing user experience.

SHARE THIS PAGE:

Why every insurance business should have live chat

With so many success stories for using live chat for sales and support, the opportunities should not be overlooked

There’s been plenty of studies showing how effective live chat really is, showing how much it is preferred over other channels for customer contact. Surprisingly, however simple it can be to implement the technology on a website; there’s still many businesses that have not yet adopted live chat to engage with customers – and are missing out on opportunities.

Why is live chat so important? Here’s some statistics that can help to answer the question:


Live chat leads to customer satisfaction


Live chat scores the highest satisfaction rates for customer service as a channel. 73% of those who have used live chat for customer service have reported to be happy with their experience, compared to 61% for email and 44% for phone.


It’s what your customers want


Ever heard that phrase that says give customers what they want? Well, it’s quite simple. They want live chat. 63% of consumers have said they are more likely to return to a website if it has a online chatbox available online, so, just image how many potential customers you could be saying good-bye to if they visit your website and find out there is no live chat.

Reports have shown that this is particularly important when it comes to e-commerce sites. 44% of customers have expressed that the availability to chat with an agent during an online purchase is one of most important features a company can offer.


It helps to keep visitors on your site


55% of online consumers are likely to abandon a site if they can’t find an answer to a question. With live chat as the logical resource to tackle this issue and provide instant answers to questions online, it seems like a pretty bad idea not to have it on your website.


Live chat drives results


More than keeping customers happy, live chat helps businesses to improve conversion and sales. The numbers speak for themselves: 49% of companies that use live chat have reported an increase in conversion rates within 2 years of implementing it, and 30% have seen up to a 10% increase in revenue after using live chat for less than 1 year.


How does live chat help insurance companies?


Talking more specifically about the insurance market, and why live chat is relevant – it’s essential to remember that in this industry, trust is a key factor.

When customers buy an insurance plan from a broker, it is usually because it’s someone they trust, someone they know will understand their needs and what is the best solution for them, who can guarantee quality and results. Live chat is well-known as a channel that helps to build trust and customer relationships from the moment contact is established. In the online space, human contact is usually minimised to a mechanical interaction of user and screen – but live chat presents the opportunity to humanise the online experience and add a personalised touch to the customer journey, helping to establish that trust that makes all the difference in the insurance business. 

Through a live conversation, an agent can not only provide instant help and quick answers, but also speak to the potential customer and get valuable insights, in order to offer recommendations and products that are best suited to their needs. It’s a window of human interaction where reliable support can take place, and great service can be delivered. The impact of service and experience cannot be overlooked by insurers; a study found that an enormous 91% of insurance holders say that good service makes them more likely to stay loyal.

Here’s 3 main benefits that insurance brokers and firms experience by implementing live chat on their websites and through the journey:


1- Assistance at the purchase stage


As we’ve said before, an online conversation can go a long way in pre-sales scenarios, for customers in the buying stage. Purchasing an insurance plan is not as simple as buying a t-shirt; there’s frequently a number of questions and uncertainties that can stop consumers from completing the process, and when the information is not easily found online, live chat can be the ideal solution for clearing up any doubts.  

Tip: Automated chat responses can help you by taking care of simple queries and answering basic questions. Use a chatbot to answer when you are offline and to automate quick responses to the most commonly asked questions. The chatbot can also capture contact details for you when you are not available, and get an agent to intervene when it’s most appropriate.


2- Live support to deliver the best solution 


We have talked about live chat provides the space for reliable advice. With insurance, it’s often the case that there’s extras or product features to complement a specific plan, and these that can be overlooked by the customer who is not familiar with the subject. A conversation through live chat can bring light to the gap and enable the delivery of complementary solutions.

Tip: Combining live chat with co-browsing can help insurance agents and brokers to take live support to the next level. You can talk online while navigating on a webpage at the same time as the customer, to point at specific elements on a policy page, for instance, to help them fill an insurance application form or show them where to click to add an extra to the plan they have purchased.


3- Providing instant documentation


One of the major benefits of an advanced live chat tool is that the exchange of documents can happen instantly and with minimum friction.  No more going back and forth via email with required paperwork; live chat is a tool for instant feedback. An agent can request from the prospective customer any necessary documentation right from the chat screen, and when completed, the customer can get their policy instantly delivered.

Tip: Use a live chat platform that will also document every conversation for much valued context and reference for your team, and that can integrate with channels like email and SMS to provide documentation for the customer through other appropriate channels.


Get a web chat platform that has it all


If you’re looking to wow your visitors and revamp your online customer journey, take Ibby for a spin. Get started with a 14-day free trial. You’ll be surprise at how easy it is to improve support and boost sales with a live chat platform that combines features like co-browsing and workflow automations!



SHARE THIS PAGE:

3 ways to supercharge your IFA business with fintech

IFA businesses are adopting fintech at a rapid pace. Use it to give your business a boost!

There have been a lot of changes within the financial services industry recently. Due to the uptake of new technology, changing client demands, and more competition, no one can afford to be complacent. The employment rate in the financial advisory industry is set to increase by 7% by 2028 according to the US Bureau of Labour Statistics. Competition isn’t limited to rival firms anymore. Developments in financial technology (fintech) has created a new competitor for financial advisors: the robo-advisor. It isn’t a surprise that 60% of advisors claim that attracting new clients is their main challenge.

To stand out, financial advisors must incorporate new technology into their business model. While fintech may have created some of the challenges, it may also be the solution. 53% of small firms and 70% of large firms plan to invest in technology in 2019. Read on to discover the top 3 ways that fintech could help grow your business. 


1. Free up time for high-value work


There are some tasks that a self-service platform can’t do. Three-quarters of clients are concerned about a prolonged market downturn. Only a financial advisor can understand their concerns on an emotional level. They may need to spend more time supporting clients who are feeling uneasy about the state of today’s economy. However, it can be difficult to spend more time with clients when you’re buried under a mountain of admin work. That’s why 17% of financial advisory firms are investing in fintech. Automating regular tasks like admin work or portfolio rebalancing gives employees more time to spend on building customer trust and loyalty.

Many IFA businesses are also adopting a hybrid approach to reduce the number of customer service calls they receive. Live chat and automated messaging software is being used to respond to common customer queries. It can even send clients to relevant webpages and resources where they can find more information. When the time is right, the chatbot will connect the client to an advisor. Firms can tailor their automated service funnel to suit their customers’ needs. Rather than fear robo-advisors, these savvy firms are incorporating them into their customer experience strategy. By doing so, not only are advisors freeing up more of their own time, they are also saving their customers’ time. 

Tip: supercharge your customer service with Ibby’s cobrowsing software. The dual cursor technology will allow you to browse with your customers in real-time so you can guide them through complex processes, increase online conversions and reduce the number of drop-offs. Combine this with live chat for an outstanding customer service experience.


2. Know what clients want before they do


Financial advisors expect fintech to disrupt the service they provide to clients. When surveyed, advisors claimed that emerging technology is changing their role and clients’ expectations. Advisors expect future clients to turn to them for help to plan their financial investments and educate them, rather than simply manage their finances. IFA businesses must have an in-depth knowledge of their clients before they can offer strategic advice.

Advisors are turning to software that tracks clients’ situations and will help them gain an in-depth understanding of what advice clients need, both now and in the future. For many, this means investing in a smart CRM system. Collating customer data from multiple touchpoints in one place allows advisors to better support their customers. The right software can provide advisors with the context they need to give strategic advice. If a client doesn’t think their advisor understands their needs, they may decide to look elsewhere for financial advice.

CRM software that can keep up with the advances in messaging is in high demand in the financial sector. Gone are the days when customers would call between 9 am – 5 pm to discuss their account. Today, clients expect to reach their financial advisor by email, live chat, SMS and social media. Advances in CRM tools makes it possible to capture client conversations across multiple messaging platforms and record them against each person’s profile. This data creates robust client profiles that can be used to personalise communications. Advisors can now engage with customers at key times in their lifecycle using automated messaging. This can include simple things automated messages on birthdays as a nice gesture for clients, or automatically contact and re-engage former customers whose business has lapsed.

Advisors can also use this information to be more proactive. If they understand customers’ interests and financial goals, they can reach out to high-value clients to offer support when it’s needed. This can help build client loyalty and improve customer retention.

Ibby’s CRM will keep all client records in one place so you can access the information you need to support clients and build customer loyalty. Its advanced messaging software allows you to contact customers on live chat, SMS, email and Facebook Messenger!


3. Generate leads at scale


Growing a business in the financial services industry can be challenging. Especially if you are a smaller IFA business that may not have the same resources as a larger firm. Potential clients don’t always stick to standard office hours when they contact you. Then, when you contact a new business lead, you could end up wasting time if they are unsuitable. 

Financial advisors can use automated solutions to increase the volume of quality new business leads and make it easier to follow-up on potential clients. Chatbots are a handy way to capture leads 24/7 and add potential customers’ details directly to the CRM. Once in the system, automated tasks can be set-up to assign a team member ownership of each lead. An automated workflow can be created to send a message to new business leads after they have submitted their enquiry. Acknowledging their submission is a great way to start building a strong relationship right from the first interaction.

Advisors can also cut down on the number of poor leads they receive by using automated chat templates to ask pre-qualifying questions. This lets them focus on nurturing valuable leads and turning them into customers. 


Take the next step with Ibby


At Ibby, we are combining the latest tech for IFA businesses and financial advisors to revamp their customer journey. From chatbots to messaging workflows, open banking features and co-browsing – we can empower your team and your funnel to maximise sales and support.

Sign up to start your free trial and discover the power of conversational automations for financial advice.

SHARE THIS PAGE:

How lenders can optimise processes with Open Banking

Open banking can pave the way to slicker and safer lending.

As a key driver for economic performance, it’s understandable that the rigorous framework supporting banking and lending hasn’t let up much over the years.  The stern hand of the lender is seldom prized open to do business recklessly. However, a sharp increase in both commercial competitors and availability of scaleable financial technology has driven change in the industry, whereby the leading competitors are now looking to accelerate their decision-making processes.

Industry insiders of late have been excitedly touting Open Banking as the solution to much of the long-winded decision-making processes; but what exactly is Open Banking, and to what extent can it really make a difference in the industry?


Open banking: what it is and what it means for lenders


Well, Open Banking is a secure way for financial service providers to uniformly access a potential customer’s financial information. (1) The system works by sharing financial information electronically, securely via application programming interfaces (APIs) with program and app developers.  FCA authorised third parties or financial organisations can share select information on an individual in this way so as to drive a better deal for all parties, to improve application and processing speeds, and to phase out less secure ways of obtaining financial data across organisations.

This all sounds great, but seeing as we live in the age of heightened sensitivity about data sharing, should people be worried about a privacy risk through Open Banking? In short, no. Open Banking is actually more secure than prior methods of app based data sharing, like screen scraping. Open Banking does rely on sharing data, but the specifics of which data is transferred on the API, and those who will be able to access it, are still determined by the user. The industry is more highly regulated than ever, and any would-be customer will need to opt-in to data sharing on any platform they wish to utilise. That information would then be subjected to robust security measures and encryption to ensure that it doesn’t fall into the wrong hands.


Benefits for both business and consumer


Often, enhancements of this kind are driven either to improve the experience of the customer, or the supplier. In the case of Open Banking, both parties can benefit.

Despite only emerging in the last few years, the customers transacting with companies in the lending market are already beginning to reap the rewards of Open Banking. Light touches to simplify the online experience have been emerging with industry leaders introducing features like live chat, and co-browsing, but Open Banking takes things one step further in terms of a more unified approach.

The key to it is that it reduces the amount of sharing of physical documents and manual bank statements from potential customer to lender. The traditional means of this is time consuming and much more susceptible to human error. By being able to verify data at the source, a significant repetitive task is lifted from the customer and the lender, while also mitigating the risk of incomplete or inaccurate data. This quicker route to market is beneficial for the lender from an operational standpoint, and better for customers in terms of overall experience.

Essentially, the playing field is levelled by Open Banking. The data is opened up to levy the traditional incumbent lenders with the same expectation and innovation level as the new market disruptors.

Bee Eye’s VP of Sales, Yosef Kaplan put it well when he said, “with open banking, a bank which is tasked with making a credit risk decision now has a treasure trove of data and analytics open to it.” The traditional problems of more established lenders, as well as new market disruptors are both eased, which will ultimately strengthen the industry.

The larger, traditional lenders have had the benefit of a lot of historical data, but have lacked the slick processing power and innovative adaptation of data that usually comes with start-up new market disruptors. The new players in the market, until this point, have often struggled with the opposite problem, in that they could move quickly on product and proposition, but were somewhat exposed financially due to the lack of historical data available to them.

The largest blocker to lenders both old and new can be removed via the integration and adaptation of Open Banking. This is a real shot in the arm for an industry which is coming in for more and more scrutiny from a regulatory standpoint. The offerings of lenders can now be validated across the board, negating the high stakes approach which can cause market uncertainty.

It really is an exciting time to operate in the financial services industry, with so much innovation coming from fintech advances, and so much more possibility laid before it. Only the tip of the iceberg is visible in terms of what Open Banking can do for financial services, but a continued focus on innovations of this kind will absolutely drive higher standards for everyone connected to it.

A data driven analytical approach is the single greatest enabler for innovation; so all eyes will be on the players in this market to see who will make the next great leap of progress to strengthen the industry.



Ready to capitalise on Open Banking opportunities?

Professionals in the lending industry and beyond can partner with Ibby to get the most out of the latest advances in technology, including instant messaging and co-browsing software with integrated open banking functionality.

Take our platform for a spin; get started for free or get in touch to request a free online demo!


SHARE THIS PAGE:

Ibby helps customers globally, you live on Earth right?
Start your 14 day free trial now!

START FREE TRIAL

No credit card required. Easy setup.