Connect with us

Banking

REVOLUTIONISING THE LETTINGS INDUSTRY WITH OPEN BANKING

Published

on

By Joanne Jackson, Group Lettings Operations Director, LRG

 

Similarly to PropTech, Open Banking has grown in prominence over the last few years. Today, more than 2.5 million people use Open Banking to easily move, manage and make the most of their money. This figure has continued to grow as the technology has become more embedded and easier to use. Yet this revolution in how we bank or pay for goods isn’t just for the retail sector, it’s also having a positive knock-on effect for the lettings industry. In fact, Open Banking is making the process of tenant reference checks and payments quicker and smoother than ever. After recently adopting Open Banking technology, at LRG we’ve found a big impact and opportunities for the future of our lettings business, and the wider industry.

 

Open Banking explained

Years ago, financial data was kept within the biggest high street banks, and this cemented their market monopoly. Open Banking, as its name denotes, is part of Europe-wide regulation to open this process up to the growing fintech sector. It stipulates that your bank or payment provider must share your information (bank account, credit card details, etc.) if you request it via authorised third parties, such as budgeting or saving apps.

Joanne Jackson

The regulation was initiated by the Competition and Markets Authority (CMA) back in 2018 and aimed to give more power to financial products that would help people better manage their money. For instance, through Open Banking customers could use an app that could look at their spending and recommend a credit card or savings account that would benefit their finances. In the lettings industry, this means referencing services can connect to your top-level bank account details and quickly check your regular payments or credit availability.

 

How Open Banking saves time across the board

The transparency of Open Banking is advantageous to everybody involved in the lettings process, particularly tenants. Imagine you’ve found your ideal rental and on top of all the other moving concerns, you also have to wait on tenterhooks to see if your references have been approved. Open Banking does away with the wait and the anxiety that comes with that process, by providing a real-time view of a tenant’s bank account, income, and previous rent payments.

The difference in time spent for all involved is game-changing, with references being confirmed in a few hours instead of a few days. In addition to time saved, the user journey for all parties is smoother, increasing customer satisfaction for clients, alleviating stress and helping them move through the rental process faster.

The technology reduces frustration for landlords, who may be dependent on rent payments for other financial commitments. Agents also benefit by having time freed up that might otherwise be spent going through the manual reference process for a move.

 

Open Banking opportunities and benefits

LRG became an early adopter of the technology at the end of last year. We were, fortunately, able to work with a referencing provider that supported Open Banking and it has changed the lettings experience for us and our customers. Back in October, we introduced Open Banking for our lettings customers and by the end of November, just eight weeks later, we had 60% of new tenants using it.

The rapid uptake was supported by our staff being able to discuss the benefits of Open Banking fluidly and confidently with potential tenants. As with all new technology, there is apprehension with anything that grants access to your data, particularly the financial kind. To address this, we put our staff in the customer’s shoes, with visual representations of how the process will look for them. This ensured they were able to answer many common questions that might arise. Of equal importance, was equipping our staff with the ability to reassure customers that being able to see transactions was the only thing Open Banking would allow.

 

Why consider the switch?

For any letting agencies considering making the switch. time spent training staff on the transition to Open Banking is invaluable. For us, our team were able to explain the benefits and the speed which the Open Banking service can provide. It has meant that we now have 90% of new tenants using Open Banking for lettings referencing – although some of those do still have to go through the traditional reference process, depending on the results of the initial process. Through an online portal, agents can see customer progress and spot how it has positively impacted our efficiencies and the finances of our customers.

Open Banking in lettings and the two hours on average it takes to confirm a reference is also a significant USP to leverage in the current market, where it is not yet the norm.

 

Shaping the future of lettings

There’s no doubt that Open Banking will be a permanent feature of all lettings in a year or two, or even sooner, due to how quickly the industry moves. We predict that this will likely increase as more people understand and experience its benefits.

Open Banking’s current and future application in the lettings industry is the first of many exciting changes that help connect tenants to their dream property.  Now is the time for letting agents to embrace the technology and bring a significant change to their operations.

 

Banking

BUILDING BETTER BUSINESS PLANNING THROUGH OPEN BANKING

Published

on

By

Richard McCall, CEO, Armalytix

 

Despite the end to Covid-19 restrictions in England on 19th July, Britain’s small businesses face an uncertain future.  Many have taken advantage of the various Government schemes available to help business through the pandemic, but as the reopening begins businesses will need to make crucial decisions on repayment of loans and recruitment of new people.  CEO of Armalytix, Richard McCall, believes access to timely financial information, made easier by Open Banking, helps these businesses make the right decisions for the future.

 

A recent report by the House of Commons library shows Britain is a nation of small businesses; less than 100,000 businesses in the country have more than 250 employees with a staggering 5.7 million employing less than 10.

For smaller businesses, the challenges of getting business done can get in the way of planning. 65% of SMEs do not have a business plan or financial forecast in place, according to the Corporate Finance Network (CFN) and Association of Chartered Certified Accountants (ACCA) UK’s joint SME Recovery Tracker.

As these businesses enter the post-Covid recovery phase, many will be facing multiple challenges.   The UK Treasury offered a comprehensive response to the COVID-19 pandemic, including VAT deferrals, bounce back loans and the furlough scheme. However, as these business support packages come to an end, a unique set of challenges emerge for small businesses. Directors will need to make decisions about bringing back employees at the same time as loan repayments begin. Others will need to consider how to repay tax deferrals despite an uncertain business landscape. Accurate business planning has never been more important.

 

Richard McCall

Up-to-date financial information

Most smaller businesses are susceptible to peaks and troughs in trading and are used to a “feast and famine” existence.  But the circumstances of the second half of 2021 will be unfamiliar for every business. Smaller businesses will need to rely more than ever on the support of external consultants – such as accountants or financial advisors – to help better understand the financial environment their business is facing.

Getting access to accurate and up-to-date financial information is critical to making informed decisions, but many advisors struggle to get this information from the small businesses they support. Even businesses that do regular monthly or quarterly management accounts find the process of sharing banking information complex.  For example, accountants often receive either a jumble of photocopied bank statements, which need to be digitised manually, or csv files of banking information, which can be easily manipulated or corrupted.

 

Open Banking for business

The Open Banking standards were launched in the UK during 2018.  Open Banking connects banks, third-parties and technical providers – providing them with a simple and secure way to exchange data for customers’ benefit. It provides a trusted and reliable framework for the sharing of financial information.  Open Banking enables businesses to quickly and simply authorise apps to access and share specific and relevant financial information in a safe and secure way.

 

Simplicity and security for small businesses

With Open Banking, accountants and small businesses can streamline how they share financial information.  Rather than sending a request to share financial information directly to a business owner, Open Banking allows advisors to do so within a secure platform (typically a third-party app that directly requests access to specific financial information).  This can be requested by date or bank account.  For the business owner, it is simply a matter of authorising the accountant’s request to extract the relevant information from a banking app and sharing it securely with the advisor.  There is no waiting or hassle – the secure sharing of the right information can happen in seconds.

The process saves time and effort – in many cases days’ worth of chasing and longer still in either manually retyping the information or importing it into an accounting platform.  By reducing the manual input required it is also possible to eliminate human error.

 

Better information is better insight

While this process makes life more straight forward for advisors it is also in the interests of small business owners.  Half of UK businesses are not registered for VAT, which means they are only required to file a statement of accounts annually.  This is far from ideal for business owner that need to keep a close eye on business performance: by the time an advisor sees that a business is struggling, it could be too late to intervene.

Faster access to accurate information acts as an early warning system for professional advisors to highlight any concerns to business owners.  This is an important role at any time, but in the current uncertain environment access to timely information is more important than ever. In the complex post-Covid environment, businesses will need to navigate bringing staff off furlough at the same time as repaying bounce back loans and tax deferrals.  With uncertainty around future lockdowns or the speed at which the economy will return to normal, business owners need accurate financial information to make the right business decisions.  By offering their clients financial information sharing via Open Banking, advisors can make life easier for themselves and help small businesses more effectively navigate an uncertain future.

 

Continue Reading

Banking

NEXT GENERATION BANKING: MAXIMISING REVENUE AND ADDING VALUE THROUGH FINANCIAL SOLUTIONS AS-A-SERVICE

Published

on

By

Michael Mansard, Principal Director – Subscription Strategy at Zuora

 

The UK’s financial services (FS) sector has reached a tipping point. Lower interest rates, tighter regulations and higher fines have piled on the pressure for both legacy banks and fintech startups. With the economy entering recession in the wake of the pandemic, market caps are plummeting, and many have raised concerns on what the industry might look like moving forward.

More traditional FS organisations have evolved to manage risk to the millimetre, but today’s environment is making it increasingly hard to do so. What’s more, this stoic approach to risk aversion comes at the cost of agility, with many businesses still operating on business models that haven’t changed for decades. In the UK market, for example, the concept of “free banking” has become ingrained, with FS organisations believing that customers simply won’t be willing to pay for their services.

However, there is research to prove that consumers are willing to pay for a service, provided there is clear value attached to it. This opens up an opportunity for a new business model, one that will enable FS organisations to improve and expand their offering, maximising profit while delivering genuine value to their customers. To compete with newer, more agile digital players, it’s clear that changes need to be made, and that more traditional firms need to consider building out a new digital offering, as opposed to simply expanding their existing services.

 

Next generation banking

The COVID-19 pandemic has accelerated an existing global trend in consumer buying behaviours. Individuals are increasingly moving away from buying “things” in favour of spending their income on experiences. This shift towards “the end of ownership” has, in turn, spurred a surge in subscription services.

Subscription models charge customers a recurring fee at regular intervals, whether that’s weekly, monthly, annually or on a pay-as-you-go basis, to access a product or a service. The key differentiator between paying for a subscription service in installments and the recurring fees or premiums available through most FS organisations is the focus on customer-centricity, whether that’s through pricing, delivering continuous value or giving subscribers power over their own customer journey. Zuora’s recent  End of Ownership Report found that subscription models are proving popular for this reason, with 77% of UK adults currently signed up to subscription services.

For the financial services industry, subscription models could open up more opportunities to upsell and cross sell different services, helping to maintain existing customers, reduce churn and unlock new streams of revenue. One FS organisation leading the way in this area is Singapore-based DBS bank. DBS’s Video Teller machines are the first of their kind in Singapore, enabling customers to interact with agents through virtual conferencing. The bank’s SingPass face verification technology also enables faster sign ups, helping to cement its position as a leading player when it comes to the digitisation of processes and services.

One of DBS’s projects, an initiative titled Start Digital, has been launched in partnership with the Singapore government. Designed to accelerate the digitisation of Small and Medium-sized Business (SMBs), the subscription programme offers DBS customers a number of digital solutions to help them grow their business. Digital transformation is at the top of the agenda for every business, and this subscription service has enabled DBS to deliver true value to its customers, strengthening existing relationships whilst opening up new, improved revenue streams. DBS is, essentially, utilising subscription services to become a next-generation bank, transforming itself into a key partner in its customers’ futures.

 

Increasing value

The key to making subscription models a success is working out precisely what your customers want. For example, recent research found that over half (52%) of UK consumers would be enticed to switch to another bank if their subscription included an entertainment bundle. This was closely followed by smart phone insurance (33%) and utility services (31%). Offering these additional services may sway consumers to sign up, but for FS  businesses looking to emulate the success of DBS, the real challenge is pivoting from subscriber acquisition to subscriber retention and achieving that elusive “partner” status.

Subscription models collate a substantial amount of usage data, offering the businesses that are using them the opportunity to engage with their customer base and adjust their services to match demand. This data can help businesses to curate competitive pricing structures and develop their strategies to entice and retain customers with tailored offerings. Personalisation is one of the primary success factors for subscription sellers; tailoring a product or service to suit a customer’s individual needs is a great way to win loyalty and build stronger, long-term relationships.

Subscriptions offer FS organisations the opportunity to expand their addressable market. Banks can make their product and services more affordable, for example, not necessarily by reducing the overall cost of the product or service, but by offering customers the option to spread their payments over a longer period of time. By expanding their addressable market and therefore growing their user base, subscriptions can help organisations to boost their revenue over the long term.

In today’s ever changing landscape, building stronger relationships with customers has never been more important. Implementing the right customer experience initiatives at the right time could be the difference between an FS business remaining profitable, or going under. Subscription services, and the unique insights that they can provide, have been proven to drive growth across a vast range of industries, as highlighted in Zuora’s latest Subscription Economy Index which discovered that subscription usage has grown by more than 435% over the last 9 years. This growth isn’t set to slow down any time soon, with reports predicting that the Subscription Economy will expand into a $1.5 trillion market by 2025. It’s time for FS organisations to deliver true value to their customers and adopt subscription services as the next generation of banking.

 

Continue Reading

Magazine

Trending

Finance4 days ago

WHY PEOPLE ANALYTICS WILL PLAY A PIVOTAL ROLE IN SOLVING THE FINANCIAL SERVICES INDUSTRY’S SKILLS CRISIS

Daniel Mason, Vice President EMEA, Visier   Successfully guiding teams of employees through the post-pandemic landscape will not be easy...

Business4 days ago

BECOMING THE CEO: THIS IS HOW CFOS CAN SECURE THE TOP JOB

Mark Freebairn, Partner and Head of the Board and CFO Practices at Odgers Berndtson, explains what CFOs need to do...

Finance4 days ago

AS SAAS GROWS, FINANCIAL SERVICES MUST RETHINK THEIR SECURITY APPROACH

Ben Bulpett, Identity Platform Director, EMEA, SailPoint   The financial services industry is facing an increasing number of issues related...

Finance4 days ago

THE TECH “RENAISSANCE” OF THE FINANCE INDUSTRY – AND WHAT IT MEANS FOR RISK AND OPERATIONAL RESILIENCE

Stewart Griffiths is Co-Founder and CEO of Albany Group   Not unlike most industries, the finance sector went into something...

Business4 days ago

REDUCE CUSTOMER DISPUTES WITH DATA TRANSPARENCY

By Gabe McGloin, Head of Business Development EMEA at Verifi   The digitisation of commerce has escalated the need for...

Finance4 days ago

ATTENTION CFOs: HARNESS THE POWER OF FINANCE WITH DATA DRIVEN INSIGHTS

By Tim Wakeford, VP Product Strategy, Financials at Workday   From ensuring business continuity to mitigating risk – when it...

Business5 days ago

HOW NEW APPROACHES TO USER VERIFICATION CAN HELP BANKS TACKLE THE ISSUE OF FRIENDLY ACCOUNT TAKEOVER

By Richard da Silva, VP EMEA at Revelock   Banks and other financial institutions are battling hard behind the scenes...

Wealth Management5 days ago

DIGITAL NATIVES CAN BE THE DRIVING FORCE BEHIND THE BIGGEST TRANSFORMATION IN INSURANCE

Sam Vickerman, Practice Director, Insurance & Retail, Grayce   Often referred to as digital laggards in the finance sector, insurance...

Finance5 days ago

THE 7 KEY HABITS OF EXCEPTIONAL ACCOUNTANTS

By David Brightman, Director of Product Marketing at BlackLine   Traditional accounting has evolved substantially over the past few years;...

Finance5 days ago

HOW YOUNG ADULTS IN THE COVID-19 ERA CAN GET THEIR SAVINGS BACK ON TRACK

By Jaco Prinsloo, Certified Financial Adviser at Alexander Forbes   With fewer job opportunities and higher living costs, young adults...

Business5 days ago

DIGITAL TICKETING: THE CHALLENGES AND OPPORTUNITIES FACING PTOS AND PTAS.

Arnaud Depaigne, Product Manager, Smart mobility at Fime.   Transport ticketing has rapidly evolved in the digital age. As recently...

Wealth Management5 days ago

ROBINHOOD’S IPO COULD TURN THE TRADING PLATFORM INTO A 35 BILLION DOLLAR CONCEPT

US share and crypto trading platform Robinhood is expected to list on the Nasdaq on 29 July The company will trade...

Business5 days ago

HOW DO YOU KNOW IF YOUR M&A HAS BEEN SUCCESSFUL?

By Karen Thomas-Bland, Global Board Level Advisor and founder of Intelligent Transformation Partners.   Who couldn’t have been amazed by...

News5 days ago

BITCOIN CONTINUES TO TEST RESISTANCE DESPITE NEGATIVE SENTIMENT

Alexandra Clark, Sales Trader at the UK based digital asset broker, GlobalBlock   In spite of negative sentiment from Senator Warren,...

Business6 days ago

HOW TO REMOVE HARD INQUIRIES FROM YOUR CREDIT REPORT

Your borrowing history determines financing options and interest rates, but that’s not all. The score it defines is checked by...

News6 days ago

TATA COMMUNICATIONS LAUNCHES IZOTM FINANCIAL CLOUD PLATFORM IN INDIA

A secure, compliant and high performant cloud foundation to enhance performance and security of banking and financial services   Tata Communications,...

Finance6 days ago

HOW THE NEW AND EMERGING TECHNOLOGIES ARE CHANGING THE FINANCIAL INDUSTRY

Everyone is aware that the internet and technology, in general, are disrupting the flow of most industries and even entire...

Wealth Management7 days ago

INVESTING IN CONFIDENCE

By Carolyn Corda, CMO and CCO, Adara   Finance marketers are presented with a much-changed landscape since the one they...

Business7 days ago

MANAGEMENT COACHING: WHY IT COULD BE THE BEST OPTION FOR YOU

Often, people think of coaching as a separate external career path. What they don’t realise is that most business leaders...

Technology7 days ago

TRANSACTIONS, DISPUTES & THE POWER OF AUTOMATION

Gabe McGloin, Head of Business Development EMEA at Verifi   Everyone wants the transaction to happen Online payments are evolving toward...

Trending