More than 4 out of 10 UK consumers would use Open Banking to unlock faster loan approvals and better rates from their banks

  • New research from digital bank Zopa finds that a large swathe of UK consumers would use Open Banking to get better, easier, or faster access to credit despite its low awareness

  • The introduction of Open Banking to previously untapped verticals such as access to credit could spearhead wider adoption amongst UK consumers and reach 40 million active users by 2025

  • Zopa’s Open Banking partnership with ClearScore resulted in a 37% increase in the number of users eligible to apply for a Zopa credit card

  • The findings of Zopa’s Open Banking Report highlight the enormous and untapped potential of Open Banking to provide improved access to credit during and post the Covid-19 pandemic

As new lending begins to overtake the repayment boom seen during the pandemic, our latest research finds that over 40% of UK consumers would make use of Open Banking to apply for credit if it improved their chances of getting an offer, gave them access to better rates, or made the application faster and hassle free.

Despite that, 8 out of 10 consumers have never knowingly used Open Banking. This disconnect reveals a strong demand for the benefits that Open Banking can bring customers, despite a lack of awareness of its underlying proposition.

The Open Banking ecosystem already benefits nearly 4 million active users and is growing due to stable APIs, new consumer facing applications, and the UK’s forward-looking regulation.

So far adoption has mainly been driven by use of account aggregation services – by far the simplest and most popular use of Open Banking today. Aggregation has a positive impact on customers, with 50% stating that viewing all their banking products in one place makes them feel more secure.

Research shows that UK consumers currently use Open Banking to:

  • To view all bank accounts in one place – 34%

  • To keep an eye on all savings and investments – 28%

  • To move money between bank accounts and savings – 27%

However, Zopa’s latest research finds that the introduction of Open Banking to previously untapped customer needs, like access to credit, could rapidly accelerate this adoption, benefitting up to 40 million active users by 2025*.

The research shows that UK consumers would use Open Banking to apply for credit if it helped them:

  • Simplify the application, making the application faster and hassle free - 44%

  • Unlock better rates, accessing better rates on financial products - 43%

  • Secure an offer, improving their chances of getting an offer from a lender - 40%

Zopa’s report on Open Banking suggests that these benefits are often best delivered when fintechs work together to deliver customer value in a simple, easy to use way.

A good example is Zopa’s partnership with ClearScore, which used Open Banking to assess eligibility for Zopa’s credit card. This resulted in a 37% increase in the number of users eligible to apply for a Zopa credit card, improving financial inclusion for thousands of new customers who may have previously been declined due to thin files. Within one week of roll out, more than 43,000 ClearScore users saw a Zopa offer which would not have been available to them based on credit report data alone.

Tim Waterman, Chief Commercial Officer at Zopa, 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”.

The full report is available to download here.

Zopa currently serves half a million customers. Since acquiring its full banking licence in June 2020, it has attracted more than £600m in customer deposits for its fixed term savings accounts, issued 130,000 of its British Bank Award-winning credit cards, and became a top 10 credit card issuer. It is currently approving 15,000 new credit cards every month.

**Notes to editors ** About the research Zopa surveyed 2000 members of the general public through Censuswide between 13.05.21 – 17.05.21 and 27.08.21 - 31.08.21.

*According to ONS data set: Persons by single year of age and sex for local authorities in the UK, mid-2020, there are currently 52,890,044 adults in the UK. TrueLayer predicts that by 2023, 60% of the UK adult population will have used open banking at least once would be: 31,734,026. Based on this, by 2025, Zopa estimate that 40 million consumers will have at least tried Open Banking.

About Zopa Launched in 2005, neobank Zopa is on a mission to change the way financial services are done. 

In June 2020, Zopa was awarded its full banking licence. Using its 16 years of tech know-how, customer understanding and money expertise as a pioneering peer to peer lender, Zopa is creating simple, fair and honest financial products that work better for customers through its bank. In less than six months, Zopa fully launched its Fixed Term Savings accounts and a credit card.

Over the last 16 years, Zopa has provided unsecured loans, car finance and investment products to UK consumers. It has helped more than half a million customers get the most from their money and approved over £6bn in personal loans. In that time, it’s been named Moneynet’s Online Savings Provider for 2021, and was voted the British Bank Awards’ Best Credit Card Provider for 2021 and Best Personal Loan Provider for a fifth year in a row – the seventh time it’s won the award.

Zopa Bank Limited is authorised by the Prudential Regulation Authority and regulated by the Financial Conduct Authority and the Prudential Regulation Authority.

Zopa Limited is authorised and regulated by the Financial Conduct Authority.

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