Zopa has found 4 in 10 UK consumers would use open banking to apply for credit if it boosted the chance of getting an offer or gave them access to better rates than banks.
Research by the digital bank found that 40% of UK-based consumers would also make use of the service if it made applications faster and more hassle-free.
Despite these findings, 80% of UK consumers have ‘never knowingly’ used open banking. According to Zopa, this disconnect reveals a strong demand for the benefits of open banking despite a lack of awareness of what it actually is.
The company found in its research that the introduction of open banking to credit access – a previously untapped customer need – could rapidly accelerate the adoption of open banking, helping the service climb to 40 million active users by 2025.
The research found that of those who currently use open banking, 34% use it to view all bank accounts in one place, 28% use it to keep an eye on all savings and investments and 27% use the service to move money between bank accounts and savings.
Meanwhile, Zopa discovered that 44% of UK consumers would use open banking to apply for credit if it helped them simplify the application, 43% would use open banking to unlock better rates and accessing better rates on financial products and 40% would use it to secure an offer.
According to Zopa, these results suggest that such benefits are often best delivered when FinTechs work together to deliver customer value in a simple, easy-to-use way.
Currently, adoption of open banking has mostly been led by the use of account aggregation services – the most popular use of open banking today. Up to 50% of UK consumers stating that viewing all their banking products in one place makes them feel more secure.
Zopa chief commercial officer Tim Waterman said, “We are pleased to be part of a group of FinTechs at the forefront of innovation, bringing the benefits of Open Banking to millions of new customers. We already use Open Banking verification to ease application journeys and to power tools like Borrowing Power which help our customers improve their financial health.
“By using Open Banking to calculate credit eligibility for the first time, we are helping thousands more customers access our award-winning credit products in a way which they may not have been eligible to previously. We believe this further supports our vision to build the best place for money in the UK”.
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