A PropTech firm says Open Banking could help to transform the lettings industry for the better if it is fully embraced.
And this becomes even more important as incidents of property fraud become more common in the rental and sales sectors.
James Owusu, founder of Checkboard, says: “Some in the property industry may be wary of Open Banking, because they don’t know enough about it, because it’s new and tech-led, and it seems a bit scary, but it’s definitely the future for agents and the industry as a whole.”
Open Banking connects banks, third parties and technical providers, with the goal of allowing them to simply and securely exchange data.
It aims to give people the ability to manage finances in a secure, transparent way. Secure apps and services are designed to offer more clarity and control over finances.
Open Banking is already tied up with a large number of major lenders, including Barclays, Bank of Scotland, Santander, NatWest, Nationwide and HSBC, as well as online-only banks such as Revolut and Starling.
Other banks, financial firms and building societies who currently offer Open Banking include Virgin Money, Halifax, M&S, Investec, Sainsbury’s Bank, Tesco Bank and Yorkshire Building Society.
No-one is automatically opted in to Open Banking – it requires a consumer’s explicit consent to a regulated app or website.
“If we want to make the property market, in both sales and lettings, safer, more accessible and more efficient – as I think everyone with a stake in the property market does – we need to embrace the attributes that something like Open Banking brings” Owusu adds.
“We shouldn’t be afraid of it because it’s slightly shiny and new – we can see from the names that have signed up already, and the fact it’s heavily regulated and puts security at its core, that it’s something that can be trusted and can enhance the sector for the better.”
Open Banking first emerged in the UK in January 2018, in reaction to a 2016 report by the Competition and Markets Authority on the UK’s retail banking sector which found that ‘older, larger banks don’t have to compete hard enough to gain customers’ business, while newer banks find it difficult to access the market and grow’. One of the CMA’s solutions to this problem was the idea of open banking.
“It has a big role to play when it comes to those all-important, but often tedious and draining, financial checks that need to take place in both the sales and lettings sectors,” Owusu explains.
“It’s all app-based, secure, transparent, open and saves you as the agent so much time to be getting on with doing other things, content in the knowledge that all the checks are being carried out in a safe, speedy and accurate way.”
Owusu says plenty of sectors have started to embrace Open Banking and now it’s time for the property industry to follow.
“Automation is coming for the property sector, and Open Banking is part of that transition, but this doesn’t mean the robots will be taking agents’ jobs – quite the opposite. It will be used to save agents time, taking away those complicated and time-consuming admin tasks and instead allowing them to focus on what they do best – selling and letting homes” Owusu concludes.