Open banking to transform customer expectations

Data shows businesses understand the depth of impact, but are unprepared to fully capitalise on the change

Open banking to transform customer expectations


By Madison Utley

Although 70% of Australian and New Zealand businesses expect open data to positively impact industries and consumers alike, 72% feel it’s creating challenges for them as they’re pushed to rethink processes and customer relationships, according to new data.

Experian’s Optimising Originations revealed an increased sense of urgency to overhaul businesses’ originations processes – the way they approve credit and other loan applications.

Two-thirds of Australian and New Zealand businesses feel they need to make significant improvements to their originations performance in the next 12 months to protect customer retention and revenue. According to the survey, 46% expect a revenue uplift of up to 10% in the next two years if they invested more into originations performance, including tools, analytics and skills.

However, most businesses communicated they were constrained by the challenges within their credit application procedures, with the key pain points including:

• The increasing volume of applications (89%)

• The need for tailored approaches to credit risk analysis depending on the financial product (90%)

• The lack of efficiency in credit risk analysis (87%)

• The increasing or evolving fraud and security risks (85%)

• Keeping up with the latest credit risk analysis methods / dynamic credit risk ecosystem (84%).

“Comprehensive Credit Reporting (CCR) and open data provides organisations with an opportunity to enhance customer experience and improve operational efficiency. This is most pronounced at the point of origination, reinforcing the need to invest in agile and adaptable capabilities to process, govern decision and ingest data,” said Poli Konstantinidis, Experian GM of credit services and decision analytics for Australia and New Zealand.

“As open banking gains full momentum, customer expectations will continue to grow, expecting faster approvals and more value. If businesses are unable to keep up with the changing landscape and transform their credit processes, it’s likely they will see their competitors surpass them,” he added.

“Ultimately, businesses must challenge their traditional credit processes and become proactive in addressing the identified pain points, as nimbler competitors readily embrace technology and data to enhance the whole customer lifecycle and retain customer loyalty,” Konstantinidis concluded.

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