The benefits of using Open Banking to better understand and serve customers are well known, with financial services businesses excited by the prospect of bringing additional value to people while also managing risk and preventing fraud.
The best rates of adoption of PSD2 services can be found in the likes of the UK and Scandinavia. In Poland, most of the activity has been from service providers to improve the understanding of their customers and deliver more services.
However, many people are reluctant to share their credentials, and many banks have been surprised by the reluctance to give consent. There is an opportunity to do much more if this reluctance can be turned around.
Experian’s report – Data, digitalisation and the return to pre-pandemic growth – highlights the need to clearly explain how customers will benefit from consenting to share their information.
The need to show value is important, particularly among younger customers who may be more technically minded and place a high bar on why they will share data. Often this is in the form of better offers or services.
Higher quality decisions
The biggest winners from the PSD2 directive have been consumers. Financial services companies can make higher quality decisions, which is great for them, but they also need to pass an amount of their savings onto customers.
People are also beginning to notice that they have more opportunities to move from one bank to another, with minimal disruption. Open Banking means the same amount of data is available on new customers as existing customers and combines well with credit bureau information.
The financial services providers who are best placed to win in this environment are those who can make precise offers and then provide those products or services swiftly.
Lenders need to tailor offers to customers, so they are appropriate. For example, someone looking for €4,000 to finance a new motorcycle may be intimidated if they are presented with a pre-approved offer of €50,000 if they feel it’s inappropriate for them.
By making precise offers, you can improve the ratio of read and accepted offers and improve your chances of retaining these customers in the future.