"The move towards a fully digital process would bring additional benefits, with the ability for brokers to gain access to remote proof of ID, funds, and affordability checks, with the clients’ permission."
We spoke to Leon Muis, chief business officer at Yolt Technology Services (YTS), about how Open Banking will develop in the next few years and how it can create a smoother mortgage process for brokers.
FR: Tell us a bit about yourself and Yolt Technology Services’ upcoming plans
After launching the leading smart money app Yolt in 2017, we wanted to help more businesses unlock the value of open banking. As such, we took the technology that powered Yolt onto the open market with the launch of YTS, a B2B Open Banking technology proposition. I’ve been YTS’ chief business officer for three and a half years and helped to launch Open Banking in the UK in 2018, working closely with the Open Banking Implementation Entity and the FCA. I’ve been involved in the international banking and technology industries for over a decade, previously working as a senior consultant at ING and Fiserv.
Fast forward to today and YTS is committed to bringing a frictionless banking experience to all. We’re the leading open banking provider in Europe, building, managing, and maintaining AIS and PIS connections for top financial institutions and ambitious tech businesses. Since connecting to the CMA-9 and making that first API call in 2017, we’re now close to making over 1 billion calls – a sure sign of the increasing demand for Open Banking technology.
FR: How do you think Open Banking will develop in the next few years?
The hope is that Open Banking will develop to facilitate a truly open financial system in the next few years, with consumers and businesses able to access their entire financial footprint, from mortgage applications, to bills and smart metre readings, in one central place. Conversely, this ambition appears more likely as a result of the Covid-19 pandemic, with many digital trends accelerated, including the mass adoption of banking apps. The Government has relaunched an independent review into the fintech industry as a result of this accelerated progress, while the FCA has opened a Call for Input on Open Finance too.
However, the immediate priority over the next 18 months must be to achieve full adoption of Open Banking. After initial disappointment with the speed of uptake, momentum has built this year, with the number of people in the UK using Open Banking technology surpassing one million. However, efforts to promote greater uptake should be stepped up. Doing so would see more banks expand the scope of APIs, currently limited in most banks to payment accounts such as current accounts and some credit card accounts, to incorporate savings accounts, which only a minority of banks do. This would allow more customers to get a single view of all their accounts and experience the benefits of Open Banking. Once full Open Banking adoption has been achieved, then we can look towards Open Finance.
FR: How can Open Banking technology create a smoother mortgage process for brokers and IFAs?
Open Banking can make the mortgage process far smoother for brokers and IFAs, providing them access to services such as account information services (AIS). AIS gives a clear and instant insight into the financial activities of current and prospective customers – with that individual’s permission. For a broker assessing a mortgage application, the information made available by AIS would reduce the time each application took significantly, while also helping the customer to find products relevant to their needs much faster than could be achieved manually.
Data enrichment services through Open Banking can also help to smooth the process for brokers and IFAs. Data enrichment allows any business in any sector to use the information it gathers through AIS to directly inform business and service decisions. As such, brokers and IFAs are able to not only plan their services more efficiently, but the consumer will have a much-improved and personalised experience that will encourage them to use the service again – which is significant, given the importance of client retention in the UK mortgage market.
FR: How can Open Banking help overcome other challenges brokers and IFAs face in the post-Covid world?
Open Banking can certainly help brokers and IFAs adapt to the post-Covid-19 landscape. The lockdown period has caused more consumers than ever to start banking online, with an estimated six million across the UK downloading a banking app for the first time during the crisis. As a result, a larger proportion of UK consumers should be more comfortable with online processes, such as mortgage applications, the sharing of account information, and executing transactions digitally.
The move towards a fully digital process would bring additional benefits, with the ability for brokers to gain access to remote proof of ID, funds, and affordability checks, with the clients’ permission. As a result, mortgage and loan applications would be much more efficient and allow brokers to deal with more daily requests while also focusing on front-office tasks.
FR: If you could see one headline about financial services in 2020, what would it be?
“European economy enjoys sustained growth, powered by widespread adoption of Open Banking technology, by consumers and businesses alike”.