The introduction of open banking to the UK promises to transform the consumer experience – an Edinburgh firm is at the heart of that transformation.
Scottish fintech firm The ID Co. has received Financial Conduct Authority (FCA) approval to provide open banking services in the UK, CEO and founder James Varga has announced.
The Edinburgh-based SME has been pioneering the use of bank data and open banking since its formation in 2011. This week’s announcement marks a watershed moment for the company, which employs 26 people, as FCA approval is essential for any firm wishing to facilitate open banking.
Varga welcomed his firm’s confirmation as a Registered Account Information Service Provider (‘RAISP’) and described open banking as a fundamental shift in the market. It represents a “unique opportunity to provide consumers with a hassle-free process of applying for loans, mortgages and other financial products,” he said.
“We are all about helping businesses create great customer experiences by addressing key pains during the onboarding process.”
Open banking was introduced to the UK in January, as a secure means for consumers to use financial products and services through regulated apps. Customers can now share their personal financial information to approved third party operators. This is designed to make it easier to find deals on mortgages, overdrafts, insurance and broadband deals: greater visibility to allow consumers to compare deals.
It’s a significant change, as previously the stress and difficulty of accessing financial products was such that Brits were statistically more likely to get divorced than switch banks.
DirectID is designed to help organisations such as lenders on board their customers instantly by providing affordability, risk, compliance and credit checks in seconds as part of the application process.
“Open banking represents a huge opportunity for financial services,” said Milko Radotic, The ID Co.’s chief commercial officer. “It allows a business to truly understand their customers and offer them the products or services best suited to them – assessing affordability and credit risk while meeting responsible lending obligations,” he said.
An active participant in the UK's open banking initiative over the last few years, The ID Co. is set to announce further key open banking customer and platform enhancements shortly, said Radotic.