At the Pay360 conference in London, Yolt CEO Nic Weng Kan joined the discussion with Anna Maxim, Chief Compliance Officer, The Credit Thing (a Yolt customer) and Yasamin Karimi, Head of Product, Codat. The discussion was moderated by Vincent Brennan, a thought leader in the future of banking and payments.
Here is a selection of the key insights, with a video of the panel at the bottom of the page.
You need to put the human in the digital open banking experience for best results
While a lot of discussion about data revolves around access, and use, having a human interaction at the heart of the process can deliver the best experience, as well as convince customers to share their bank data.
An example of a company doing this is The Credit Thing, an app-based credit offering. While the experience is overwhelmingly digital, the app has a chat icon that enables applicants or customers to speak to a real person whenever they want. And according to Chief Compliance Officer Anna Maxim, a lot of the positive feedback the company receives is on their customer service, because people still want to know that there is a human behind the digital.
Nailing the value exchange is critical
If you are an average consumer, you probably agree with these two statements:
- I would be concerned to share my personal financial data with third parties.
- I would like to get the best deal I can, that suits my personal financial circumstances.
This is known as the privacy paradox, and is a central consideration to gain the buy-in of customers who have been told for many years never to share their financial data with anyone.
According to panel, there two best practices to overcoming privacy concerns are:
- Building a value exchange. Proactively tell your customers what you are going to use the data for and ensure the use of the data is always a benefit for the customer. By following these points, the value exchange is clear, and the entire ecosystem will grow into something that benefits every player.
- Be transparent about the choice. The Credit Thing, for example, explicitly tells their applicants that they do not need to share financial data. Rather, they have two choices. If they choose to share data, it will be used in a certain way. And if they choose not to share data, the customer will need to provide some additional information such as bank statement pdfs.
Building the value exchange, and being transparent about choice, are sure-fire ways to gain trust and get customers to engage with open banking.
Traditional credit scoring is limited in what it can do – open banking can help
It is no secret that traditional credit scoring doesn’t serve certain segments of borrowing prospects well – and open banking data can play a valuable role in helping onboard some of these applicants.
For example, an applicant may be very frugal with spending, but have chosen not to get a credit card or take on any other debt. For these types of applicants, or others who have flow under the radar on traditional credit bureau scoring mechanisms, offering the applicant the possibility to share their financial data, once they understand the value exchange and their options.
Learn moreContact us