Tap and go loans?
Open Banking opens up a new era of ultra-fast and simple loan decisioning, says Andrew Tierney
We are all used to going into a store and using our mobile ‘phone to pay for purchases. ‘Tap and go’ has revolutionised our shopping experience. No more fid- dling around with card readers and PIN numbers, or worse still dollars and cents, when all you have to do is wave your ‘phone. Transactions now take seconds instead of minutes. Who would have thought a few years back that by 2019 you’d be able to leave all your cash and your cards at home and go shopping with just your mobile phone? Answer is, not many. Well, we have the same situation today with taking out a loan. In what could be as little as five years, I believe the loan acquiring process will change just as dramatically.
We’ll be in a position to ‘tap and go’ a loan application. Applying for finance these days is still pretty much an analogue experience. Chances are you’ll have to wade your way through pages of application doc- uments and due diligence disclosures online, or in paper, before you get a pro- visional okay from a lender. You’ll then have to wait longer while they check if you are bona fide, in analogue time. Although lenders try, unfortunately it is most definitely not a user-friendly experience and, is as far away from a consumer’s normal purchasing expe- rience as you can get. As a result, too many prospects drop out of the process midway because it is too time consuming. Contrast this with what will happen not too far into the future. You want a loan and all you have to do is pass
your driving license number and date of birth to a lender and they will do the rest. No more time spent on lengthy applications. You may even only have to present your face to your phone, or snap a QR code and it will be done. How so? Well, Open Banking makes this likely because once your ID is verified and you have given your permission for data sharing, the lender can access all your current account transaction history in real time, run it through its algorithms and in milliseconds make ultra-accurate decisions about whether or not to give you that loan. OB is taking us from a reactive era where the emphasis is on past negative credit history (or the search for one) and time-consuming processes, to a proac- tive environment where the lender gets a complete picture of an individual and is able to make super-accurate instant
12 | Metrics Monthly
August 2019 | UK Edition
Made with FlippingBook - professional solution for displaying marketing and sales documents online