On top of Open Finance, the COVID-19 restrictions have highlighted our growing dependence on digital platforms. From individual entrepreneurs to billion-dollar corporations, digital platforms are now the backbone of society and the economy.
Companies worldwide have rushed to integrate technology for remote work. Video conferencing has become the standard, replacing face-to-face meetings. Various project management, messaging, and document collaboration tools have also been deployed.
As online service consumption rises, businesses must reassess and expedite their digital transformation strategies. They must stay ahead of upcoming trends. Open Finance solutions offer faster, more precise, and well-informed decisions in financial services. This enhances customer acquisition and satisfaction.
The Impact on the Mortgage Sector
In the mortgage sector, platforms simplify and streamline the underwriting process. These tools use applicants’ bank transaction data, reducing the time needed to verify identity and income. Consequently, this reduces mortgage brokers’ workload and enhances customer experience.
Given the pandemic, digital onboarding has become critical. Many financial and professional services companies have closed their doors to the public. Evolving consumer behaviour and economic considerations suggest a significant decrease in face-to-face customer onboarding. This trend is notable for mortgage lenders, building societies, and financial advisers. The pandemic has accelerated these trends, compelling companies to respond.
Adapting to Digital Customer Acquisition
To survive, businesses must adjust their digital customer acquisition offerings. They must maintain compliance with regulations and robust anti-fraud mechanisms. Digitisation can be achieved through intuitive Open Banking KYC digital platforms. These incorporate ID verification tools, customised customer journeys, and seamless system integration.
Open Banking solutions also play a crucial role in combating financial fraud. Recent statistics from Cifas show a 14% increase in mortgage application fraud and a 32% rise in false document submissions. The COVID-19 lockdown has seen a surge in online financial scams, exploiting people’s anxieties.
Cybercrime risks include harvesting personal data, identity theft, and online account hijacking. These have significant financial consequences for customers and businesses. Directly extracting digital data from applicants’ bank accounts helps mitigate fraud risks. It eliminates the possibility of false physical documentation and allows a thorough analysis of suspicious trends.
The Evolution Towards Open Finance
The past few months have highlighted the importance of technological agility. Companies must adopt advanced digital transformation strategies to transition smoothly to a virtual business environment. Staying competitive requires anticipating upcoming trends, like Open Finance.
Open banking has paved the way for open finance, built on the same framework. This allows consumers and SMEs to access and share their data with third-party providers. Innovative products and services can then be developed to meet future needs. Open Finance covers a broader range of products and ensures data usage, storage, and portability transparency.
Open Finance promises a comprehensive view of an individual’s financial status across all products they own. A unified interface provides banking, savings, investments, pensions, and mortgage information. It offers insights, trends, and comparisons with similar financial products.
The potential impact of Open Finance on the financial services industry is profound. It unlocks advantages for both providers and end-users. Embraced by the FCA to stimulate innovation and competitiveness, Open Finance is poised to permeate every sector. This includes banks, credit reference agencies, financial advisers, fintechs, debt charities, insurers, investment managers, and expert mortgage brokers.
The Ongoing Digital Transformation
The altered work environment due to COVID-19 underscores that digital transformation is ongoing. It has no fixed endpoint. The core commitment is to deliver improved services as demand, technology, and preferences evolve. Overcoming one challenge sets the stage for the next. Companies that fail to adapt to current and emerging trends will lag.
Thank you for reading our publication “What is Shared Ownership? | Your Guide to Homeownership.” Stay “Connect“-ed for more updates soon!
