Bluestone Mortgages has warned that the needs of non-standard customers could end up being excluded from the development of open finance if advisers do not respond to the FCA’s Call for Input by next month.
It says that open finance would extend open banking principles to give customers more control over a wider range of their financial data, such as mortgages and consumer credit. This could lead to real change in the way consumers engage with their finances, improving their access to advice and the solutions on offer, and empowering them to make better-informed financial decisions.
Bluestone says that, to this end, open finance is set to play a crucial role in supporting non-standard borrowers – who are typically excluded from mainstream lending channels – with their financial decision-making in the future.
The lender argues that ensuring that open finance develops in the best interests of consumers is of even greater importance given the number of borrowers who could emerge from the Covid-19 crisis in a more precarious financial position than they were before. It is likely that segments of underserved customers, such as those with adverse credit, will grow following the pandemic and will require additional support from brokers and lenders when it comes to accessing the relevant advice and securing lending.
Bluestone is therefore urging brokers across the mortgage market to respond to the FCA’s Call for Input on open finance, which will examine what is needed to ensure open finance develops in the best interests of consumers. The Call for Input closes on Thursday 1 October.
Steve Seal (pictured), managing director at Bluestone Mortgages, said: “Technology has been revolutionary in supporting consumers with their financial decisions, however, more needs to be done if non-standard customers are to benefit – numbers of which are expected to increase post-Covid-19. This is why it is crucial that the future development of open finance focuses on the needs and interests of underserved customers, so that more can gain control over their financial decisions and engage with a wider variety of products and advice options in the future.
“As such, brokers have a responsibility to engage with the regulator’s Call for Input on behalf of all consumers, not just those in the financial mainstream. Any move to help borrowers understand the financial options available to them is a good thing, and ensuring the interests of ‘non-standard’ consumers are placed at the forefront of open finance’s development will go a long way towards improving financial inclusion in the UK.”
Respondents can share their thoughts on the FCA’s Call for Input via the online response form (https://www.fca.org.uk/call-input-open-finance-response-form) and answer the following questions:
- Q1: What action can we take to help ensure the potential of open banking is maximised, for instance to support the development of new open banking services?
- Q4: Do you agree with our assessment of the potential benefits of open finance? Are there others?
- Q5: What can we do to maximise these benefits (given the considerations set out in paragraphs 3.12 to 3.17)?
Alternatively, respondents can email their thoughts to firstname.lastname@example.org or write a letter addressed to Tracy Linn-Peters at:
Strategy & Competition
Financial Conduct Authority
12 Endeavour Square
London E20 1JN
The full consultation paper can be read here: https://www.fca.org.uk/publication/call-for-input/call-for-input-open-finance.pdf.