Thousands of people across the UK are seeing their financial security plummet in real time.
“The next few months will be difficult,” British Chancellor Rishi Sunak warned last month as he and his government work to ease cost-of-living pressures on the country.
Soaring inflation – driven by rising energy and food prices – is being felt in every corner of the UK, forcing consumers to change their personal financial habits to reflect these circumstances difficult. Recent ONS research shows almost one in five people (17%) are borrowing more than a year ago, and a worrying 43% said they would not be able to save money. money over the next 12 months.
While some consumers are turning to personal finance experts for badly needed advice, not enough is said about a crucial piece of the puzzle: open banking.
Millions of people are stuck using inefficient financial services or prevented from improving their lives due to limited access to the right financial products. The cost of traditional financial services has a human face: creditworthy borrowers unable to apply for loans due to the escalating effect of poor credit; thousands of “unbanked” individuals who cannot apply for basic funding, government assistance or mortgages; bank customers like you and me having less control over our data and finances. This is where open banking comes in.
Open banking has the power to transform the financial well-being of millions of people. In an environment of inflation, unprecedented energy prices and tax hikes, responsible credit has never been more important. Open banking is a force for good, improving affordability and transparency to help people break volatile debt cycles and ultimately access the financial products and services that are right for them.
Basically, it offers people the opportunity to receive personalized money management support by allowing regulated companies to securely access and analyze their bank account data. With consumer consent, open banking allows third parties to grant businesses that need it access to users’ banking data, so they can provide more personalized products and services to their customers. And it’s a model that works – just ask the five million regular users of open banking in the UK who now benefit from flexible, personalized and secure financial solutions.
In just four years, the UK has seen open banking roll out across dozens of apps and products that can help eliminate debt, plan finances and provide more control over successive months. of uncertainty.
The problem remains that until open banking is more widely adopted, consumers and businesses may find control of their finances simply out of reach. If the Chancellor’s words are any harbinger of what is to come, we will need to see a significant change in open banking regulations to cushion the blow of this inflationary pinch. It is essential that the government accelerate the development of an equitable and forward-looking open finance framework and put in place a governance structure for future regulatory entities that will foster growth.
Everyone deserves to be able to access money management tools and take control of their finances. The open banking revolution is about to fundamentally transform the way people pay, access and manage their money for good. A sustained and deliberate move towards open banking can help ease the burden of the cost of living crisis in the months ahead. But to get there, we will need a concerted effort from regulators and government to propel the UK out of the crisis and into financial freedom.