Open Banking has been with us for over a year now but its impact to date has been somewhat muted, as the potential of this new and revolutionary technology remains unfulfilled.

Indeed, Open Banking still isn’t perfect, including its vulnerability to data breaches, as recently outlined by the chair of the Treasury Committee.

Open Banking is, though, potentially transformative for the mortgage market and if the right security measures are in place. Access to real-time financial data has the potential to radically alter the mortgage journey for customers, lenders and intermediaries alike.

The area where Open Banking has made the most impact so far in financial services is in terms of the customer experience. A number of Open Banking apps, such as Yolt, Connected Money from HSBC and others have taken advantage of PSD2 regulations and APIs to enable customers to aggregate and integrate their products and services from different financial institutions. Making data accessible and actionable across different platforms is a key part of Open Banking, and enables the creation of a more personalised banking journey.

In the mortgage industry, the potential benefits extend beyond tailored experiences and can transform different tasks all throughout the mortgage process. Paper-based processes are a hassle for customers, brokers and lenders but they remain a part of our industry. Open Banking provides a seamless, digital alternative which is can reduce decision times and improve customer outcomes.

Open Banking also helps to create end-to-end solutions that combine sophisticated algorithms, lender criteria, CRM systems, and APIs to deliver a more efficient and productive mortgage journey. Brokers currently enjoy dominant market share – but in order to maintain this position, brokers need to ensure that they are investing in the right mortgage technology in order to defend against disruption.

For lenders, Open Banking presents deeper layers of consumer data and insights. Having this access allows lenders to make behavioural decisions and build more predictive, consumer-friendly, and personal services.

If Open Banking is to take off, it needs to deliver a transformative experience for the customer – one that makes it worth sharing your data for. It could allow people to provide their bank data and spending habits to lenders instantly, which reduces the time it takes to process a mortgage. While most high-street lenders now enable Open Banking, it is still taking time for less mainstream lenders outside of the original CMA9 to follow suit – with only a couple currently offering this. This information can be used to provide tailored financial products and assess affordability and other borrower characteristics.

We have not yet seen the full impact of Open Banking in the mortgage sector. Its success or failure will depend on whether the market can find the application that transforms the mortgage experience for customers in a positive way while avoiding the data breaches that have affected consumer trust in other sectors.