Open banking has been more widely adopted during the pandemic, so more than half of British lenders plan to speed up future roll out.

More than 50% of UK money lenders have said they plan to adopt open banking in 2021, according to credit management firm Know-it.

The way businesses and customers engage in the banking ecosystem are set to change this year, with 93% of those businesses also expecting to adopt the data-sharing initiative in the next 12 months.

Around one-fifth of lenders (19%) said that Covid-19 had caused them to accelerate plans to implement open banking-enabled products more quickly as it has now become “evident” that consumer adoption of new technologies was accelerated by the pandemic.

Many banks were forced to close branches during the first lockdown, forcing aspects of credit lending to be accelerated online, such as ID verification and payment tools.

Recent research from consumer reporting specialists Equifax found that “significant changes” in the way customers and businesses participate in the banking ecosystem are “incoming”.

Commenting on the research, Lynne Darcey Quigley, Founder and CEO of Know-it, said: “A business owner’s aim is to maintain financial health. To improve return on investment (ROI) and keep customers happy, the right financial tools and innovative technology are necessary. Most small businesses use third-party financial management services.

“Accounting, consulting, and credit management are some of the financial services available to SMBs (Small, Medium-sized Businesses). To run a successful SMB, it takes more than simply selling products or services to customers.

“It is controlling the entire credit control process to help ensure you receive payment. SMB owners are more likely to make the right decision about open banking when they understand that fact.”

According to research, the total value of open banking payments is set to exceed £210 million this year in the UK.

“Developed fintechs are filling gaps in the UK financial ecosystem, making the destination an excellent place to develop a digital banking brand and expand services abroad,” Quigley said.

“Even though traditional banking doesn’t entirely disappear, it’s undesirable to deny the relevance of fintech. Innovations in technology allow for easy money transfers, secure online payments, and automation of business processes,” she added.

A report from open banking platform TrueLayer and YouGov from July found that while card use still dominates in most payments, around 74% of merchants said they plan to use open banking technology to offer instant bank transfers in the future.

Plus, fast adoption could be required after previous data collected by Juniper Research found that around 53% of the world’s population could be digital banking as early as 2026.

Currently, digital banking services reach around 2.5 billion people worldwide. However, this could be boosted to 4.2 billion within the next five years.

Quigley continued: “Modernising the banking industry is an evolving process, but for now, digital is the dominant trend. Due to the growing number of challenger banks and fintech’s going strong in the UK and elsewhere, competition among banks and fintech’s is becoming fierce.

“It is no longer an option for traditional banks and firms wishing to survive to remain stagnant in the wake of a tumultuous period marked by the threat of a pandemic and there exists a huge opportunity for fintech businesses who are seen as more agile, nimble and flexible to collaborate and partner with more traditional banks and financial services firms who can offer experience, access to networks, supply chains and scale.”

This article was first published by digit.fyi