Pandemic speeds up Open Banking adoption
9 October 2020: Writing for the Financial Services Faculty, journalist Laura Miller looks at how the pandemic has driven Open Banking adoption.
Traditional banks are being pushed by Covid-19 to speed up adoption and adaption of digital services including Open Banking, according to industry experts.
Demand for banking services skyrocketed with the introduction of government pandemic assistance programmes like mortgage and loan holidays. But with offices and call centres closed, banks were unable to manage the inflow, leaving customers seeking help on hold for hours.
Open Banking – which enables data sharing and decision-making across third party providers using increasingly comprehensive financial information – has been slow to take off, but industry watchers say the meltdown of traditional banking service during the height of the pandemic is the catalyst it needed.
“The pandemic has brought the limits of legacy IT into sharp focus. Making the most of Open Banking requires modern technology services which can move with the times,” says Ammar Akhtar, CEO and co-founder of Yobota, a cloud-based platform for financial institutions.
PwC predicts more than 33 million people will have signed up to Open Banking driven services by 2022; over half the UK’s adult population. This will require overcoming more of the public’s trust issues around data sharing tech, however, something politicians and the industry will need to join forces on.
“Government and financial services need to improve awareness of Open Banking and what it entails,” Akhtar adds, “once people see the benefits and trust their data will be handled responsibly, we will see many more take advantage of it”.
You can read about this in more detail here.