Open Banking is finally set to take off in 2019

2018 was supposed to be a revolutionary year for financial services consumers and businesses alike. The introduction of Open Banking – an initiative which allows customers of the UK’s nine largest banks and building societies to share banking data with third parties – was touted to shake up competition in the sector, and change how customers choose their service providers.

The reality is, though, that things have taken a little longer to take off than expected. The big banks, who still lay claim to the vast majority of the banking market, have been slow to build out native Open Banking solutions. Fortunately for consumers and businesses, tech providers like TrueLayer and Bud are building out-of-the-box products that enable Open Banking to work in practice.However, with more buy-in from the banks, it's fair to say that Open Banking might have more name recognition than it does right now.

With the foundations now firmly in place, though, we think 2019 has the potential to be a transformational year for Open Banking. Figures released by the Open Banking Implementation Entity (OBIE) show that the technology was used 17.5m times in November last year, up from 13.9m in October and just 6.5m in September.

And there’s clearly a growing appetite among financial services providers, too. As of January 2019, fully 84% of them now have Open Banking services either live or in development, according to law firm TLT.

We’re proud that Growth Street was at the forefront of the Open Banking movement in 2018. Greg Hinch, Head of Product at Growth Street, explains that “we recently integrated Open Banking into our platform to help us understand our borrowers better. Now, we’re able to access real-time data on a business’s financial transactions and situation. This allows our credit and risk team to make more informed decisions when reviewing an application for a loan. We can also continue to monitor all our borrowers throughout their time with us, so we can better identify how to support them.”

“We were never able to do this to such an extent before Open Banking. It makes the whole process much simpler and faster, meaning our borrowers can focus on what’s important to them – getting on with business – rather than lots of admin.”

“Of course, it benefits our investors, too. It means we could get new borrowers approved and available to lend to far quicker. And we’re able to monitor each borrower’s performance closer than ever before.”

It’s these kinds of innovations that have helped us to be nominated recently for two awards – Best Alternative Business Funding Provider and Best Service from a Alternative Funding Provider – at the Business Moneyfacts Awards 2019. It’s great to see Growth Street recognised alongside the likes of Funding Circle, Seedrs, Funding Options, ThinCats, and Assetz Capital.

This year we will continue to innovate and push the boundaries of Open Banking. There are endless opportunities to explore how we can create a financial services industry that is transparent and puts the customer in control. We want to be right at the centre of it.

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(Your capital is at risk when you lend to businesses. Lending through Growth Street Exchange Ltd is not covered by the Financial Services Compensation Scheme.)

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