Better deals, fewer defaults: what open banking means for you

The impending open banking regulations are set to fundamentally change the way customers and organisations interact for mutual benefit.

By sharing data electronically with credit providers, time spent on filling out paper applications will be mitigated, while real-time data on income and outgoings will give lenders an accurate view of affordability, enabling fairer decisions.

Competition will also improve with richer price comparison capabilities, and businesses can build better profiles of your wants and needs.

But, most significantly, open banking will give banks the ability to better understand your financial situation.

By the time most people are in difficulty, it's too late.

Open banking will help institutions sooner identify someone at risk and re-engineer mortgage or loan repayments to reduce the risk of default, or offer better terms.

Additionally, those previously denied access to certain financial services owing to a lack of comprehensive credit data will also be able to demonstrate their ability to pay, even with no credit history, receiving better and fairer deals.

Get stories like this in our newsletters.