November 29, 2019
Over the past few years, banking has far transcended from the typical brick-and-mortar system in more ways than one. With automated systems and digital processes embedded in almost every modern bank’s service offering, it is interesting to observe the many transformations that technologies like AI and Open banking have brought into the industry. Artificial Intelligence (AI) is a technology that encompasses the ability to automate human cognitive processes, including problem-solving, pattern recognition, and speech recognition, with the added benefit of eliminating the possibility of human errors. Open Banking offers the perfect platform for AI to manifest itself in the banking and lending industry.
Since its inception, the system aimed to encourage competition and lower banking costs for customers. The scope of Open Banking includes the complete account details and transaction history, making it easier for lenders to assess the credibility and evaluate loan applications.
It arrived as the right for customers to manage their wealth better and for bankers to offer more transparency and convenience to their account holders. As of 2018, many popular UK banks such as Barclays, Lloyds, and HSBC gave customers the control of their account and allowed the sharing of data with third-party applications. Companies, including lenders, brokers, and advisors, request customers to share this data by partnering with specially regulated technology providers called AISPs. Along with offering ease of banking, Open Banking granted lenders the ultimate platfo ...