Open Banking could boost UK GDP by £1 billion - Cebr
26 February 2018 | 5516 views | 0
The introduction of Open Banking in the UK may contribute over £1 billion annually to the UK economy and support the creation of up to 17,000 new jobs, according to analysis by economics consultancy the Centre for Economics and Business Research (Cebr).
The research, conducted on behalf of online reviews platform Trustpilot, assumes that the wider availability of customer account data will exert downward pressure on interest rates charges on financial products, such as mortgages, due to a clearer understanding of a person’s underlying credit risk.
In generating the £1 billion figure, Cebr analysts estimated that every one percent reduction in the credit spread on mortgages leads to a £153 million increase in GDP, with Open Banking assumed to result in a seven percent reduction in today’s credit spread.
Cristian Niculescu-Marcu, head of micro-economics at Cebr, says: “Our analysis suggests Open Banking will have a positive impact on UK GDP as additional funds become available for productive use in the wider economy, but the degree to which these economic benefits are realised is dependent on the readiness of consumers to consent to sharing data.”
This may be easier said than done. Recent research from Accenture found that 69% of people may not consent to share their banking data with third-parties.