Ian Major, Operations Director at Runpath, a part of Experian. 

Today, customers expect an instant service and a high-quality product offering.

To do this, they need to accept their data will be an enabler to meet this expectation.  More data, and more understanding, can enable more opportunities.

An Open Banking era

Indeed, the introduction of the Open Banking initiative is presenting enormous prospects for lenders.  Data-driven banking will allow banks to make better commercial decisions based on their customers’ behaviour, while Personal Financial Management platforms will help banks offer their customers a better experience all round. However, the benefits of being able to ingest and utilise the data available today far surpasses being able to decide whether to lend or not. This data architecture offers organisations the chance to be more efficient across operations, help digitalise and modernise decision making, and predict and pre-empt credit difficulties. Ultimately, it helps tailor better user experience for everyone, which can then broaden the opportunities for both better lending and customer retention.

For us to do this, technologies, such as Platform-as-a-Service (PaaS), are key, helping lenders keep up with the ever-changing needs of the customer. For example, our data aggregation platform, Verdus™, means approvals can be put through swiftly and with significantly more automation. But without access to open and closed data sources, all of this would be impossible.

Open Banking is a key moment in this journey because it effectively turns banks into personal management platform providers, allowing them to capture new revenue streams from their innovative products, built on our Verdus™ platform. By harnessing the power of much richer data about an individuals’ finances, it’s now possible to introduce better, more affordable and highly personalised products for everyone.

The reason we perceive Open Banking to be a significant opportunity is because of the potential for greater insight from bank and payment account data, which can be used to make better credit decisions, as well as enhance a customer’s entire experience by understanding them better. However, for the initiative to take hold, consumers need to see the benefits in a tangible way which benefits them through a clear, gratifying value exchange.

The rise of Fintech 

Alongside data there is also a need for speed and convenience. This is driven by the rising use of digitally enabled tools and services, but equally by business requirements to process applications as quickly and efficiently as possible. Decisions need to be swift, but they also need to be accurate, fair and responsible. To achieve this, technology needs to be fast.

Fintechs are embracing the opportunity to bring, quickly, new models and new initiatives to the market – a key success criterion in the digital age.They are agile and adaptable in their formation meaning they have little legacy to clean-up.  They are developing components that complement the market and that resolve many of the restraints and obstacles businesses are trying to address. It’s little wonder UK investment in Fintech has reach £12bn in the first half of 2018.

To deliver a frictionless customer journey many big companies are turning towards Fintechs, who can support the customer experience, bringing new thinking and innovative technology.  This is true for Runpath, acquired by Experian in 2017.  Our expertise, combined with Experian’s rich data-sets, has enabled us to develop technology to better serve the everyday consumer and evolve product offerings in areas such as affordability, wealth and pensions, financial management and price comparison services.  For example, we believe we have significantly improved the mortgage application process, through high-speed affordability and eligibility.  This also applies to other financial products too – like credit cards and loans – all of which allows the customer and client to obtain an accurate and appropriate decision very quickly, through any connected device.

For me, businesses need to consider their priorities within any changing landscape.  Whether regulatory, technological or innovative, there is one common denominator – the customer.  Agility will therefore be critical as we enter an era of a ‘data powered future’.  However, the challenge comes from balancing speed with compliance and customer expectations.  All require an equal level of investment and focus, and each are challenged by their own design.  We are living through a period of exciting, widespread technological change. We need to be prepared to take on the challenges and embrace the many opportunities that the data revolution brings.