Open banking could help lenders save around 18,000 work hours each year, as well as reduce the costs of processes, according to a study from Yolt Technology Services.
The company’s latest report also claims open banking could help lenders reduce the average time to process a loan by over 85%.
It claims that lenders currently process an average of 6,258 loans each year and a single loan. Takes around 3.5 hours to be processed. Over the course of a year, a lender will invest around £530,053 into loan processing based on administration costs and staff time, it claims.
To get a loan processed, it takes an average of 16 days, largely stalled by bottlenecks and getting necessary proof to complete the process.
Open banking could be the solution to this, according to Yolt. Through open banking, account information services reduce the need of the manual processes’ applicants complete to provide income and expenditure data, as well as other required information.
Yolt head of UK sales Jack Tenwick said, “Both lenders and applicants want a frictionless process from application to decision to payment, however the current system that requires the manual intervention by both parties is both inefficient and frustrating. Through the power of open banking, relevant data is automatically uploaded and processed, saving time for both parties and reducing the risk of decisions made in error.
“For lender businesses, this means that not only can they offer a superior customer experience but that their own capacity for growth is greatly increased. As we anticipate a greater number of businesses looking to invest in potential growth as we emerge from Covid, this will allow lenders to meet that demand and remain competitive.”
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