Consumer Duty: A work in progress, financial inclusivity with Loqbox & more...

Welcome to the Moneyhub Monthly Update, including the latest useful content, product updates, events and insights from the world of Open Banking & Open Finance.

This month we're looking at:

• Consumer Duty one year on - still a work in progress as fines imposed 📆
• Increasing credit scores and financial inclusivity with Loqbox 🎯
• What is a Payment Initiation Service? 💸
• Open Banking Affordability in Originations and Collections ✅

Significant fines imposed as Consumer Duty remains a work in progress

A year on from the introduction of the FCA’s Consumer Duty obligations for financial services firms:

• over 40% of customers have not noticed any changes to their treatment.
• 13% said firms have failed to deliver good quality support and after-sales care
• 12% said firms have failed to deliver communications that help them to make effective financial decisions

However, many customers remain hopeful that Consumer Duty will have a significant impact on how firms interact with them. Over two-fifths (42%) believe that Consumer Duty will have a positive impact on the quality and range of products and services available - rising to 53% among younger respondents.

A thorough understanding of your customer is a key challenge for many businesses, without Open Finance providing consent-driven data insights businesses will struggle to gain the information they need to meet their obligations under the Duty.

Open Finance can give firms an ‘always on’, 360° view of their customer, and deliver the insight and tools to be able to nudge a customer at the right time with the right product.

Read the full announcement →

Increasing credit scores & financial inclusivity with Loqbox 🎯

We’re thrilled to see Loqbox leveraging our Open Banking technology in their game-changing rental reporting feature, designed to help renters build their credit scores📊

Here are just a few of the incredible results taken from our latest case study:

• Moneyhub and Loqbox have helped over 40,000 members with Loqbox Rent. -
• 89% of Loqbox members who track their credit score improve their score.
• 80% of Loqbox members felt better about their financial situation after using Loqbox.

Read the full case study →

What is a Payment Initiation Service?

If you've ever made a payment directly from your bank account to a merchant or service provider, it’s likely that a Payment Initiation Service (PIS) was part of the technology that made it happen.

As Open Banking becomes more widely used and understood, PIS will play an increasingly important role in how goods and services are paid for.

In this article, we explore what Payment Initiation Services are, how they work within the context of Open Banking, and the benefits they can offer to businesses and users alike.

Read the full article →

Open Banking Affordability in Originations and Collections

Open Banking Affordability checks are starting to have a real impact on firms ability to lend with confidence.  We know that Open Banking in originations isn't always used as the first port of call but is often used on marginal cases.  Clients offering an Open Banking journey to their marginal customers are reaping the rewards and are seeing some impressive results, not only on the ability to lend to more, some 18% more customers but also in the payment performance.  Customers who have chosen to use Open Banking in order to secure a loan have a 33% improvement in their repayment vs non Open Banking customers which means lenders can lend with a higher degree of confidence of repayment and less falling into a stressful Collections journey.

How are these results achieved?

The combination of our Affordability solution, accuracy of categorisation, smart nudges and counterparty identification provides a rich resource for enterprise clients and their customers, helping to deliver faster data insight for quicker underwriting decisions, build realistic affordable repayment plans for better repayment performance, undertake accurate fact-finding, identify capacity for loss in real-time, identify vulnerability early, refine risk models and prevent fraud. 

As a result of this improvement in speed and accuracy,  underwriters are able to lend with confidence whilst freeing up time to spend with those that need it, such as vulnerable customers and those that may fall into a collections journey.

Find out more →

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