22 April 2018
https://www.avoka.com

Open Banking could boost UK GDP by £1 billion - Cebr

26 February 2018  |  5516 views  |  0 Woman shopping with shopping trolley

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.

Comments: (0)

Comment on this story (membership required)

Finextra news in your inbox

For Finextra's free daily newsletter, breaking news flashes and weekly jobs board: sign up now

Related stories

Europe begins Open Banking era in subdued style

Europe begins Open Banking era in subdued style

15 January 2018  |  19068 views  |  5 comments | 33 tweets | 38 linkedin
Retailers eye the potential of Open Banking

Retailers eye the potential of Open Banking

18 December 2017  |  14082 views  |  9 comments | 17 tweets | 33 linkedin
BofE stress tests: Banks coud be underestimating the risks from fintech

BofE stress tests: Banks coud be underestimating the risks from fintech

28 November 2017  |  10187 views  |  0 comments | 18 tweets | 27 linkedin
PSD2: Brits don't trust retailers and social media platforms with bank details

PSD2: Brits don't trust retailers and social media platforms with bank details

02 October 2017  |  16085 views  |  12 comments | 38 tweets | 64 linkedin
Consumers unaware of Open Banking - Equifax

Consumers unaware of Open Banking - Equifax

24 January 2017  |  12954 views  |  5 comments | 17 tweets | 22 linkedin

Related blogs

Create a blog about this story (membership required)
visit www.ebaday.comVisit http://wup.digitalVisit www.nextgenbanking.co.uk

Top topics

Most viewed Most shared
Top tier banks pass first transactions on trade finance blockchainTop tier banks pass first transactions on...
11853 views comments | 20 tweets | 27 linkedin
TransferWise becomes first non-bank to open settlement account with BofE RTGSTransferWise becomes first non-bank to ope...
10252 views comments | 18 tweets | 32 linkedin
Revolut launches spare change savings toolRevolut launches spare change savings tool
9987 views comments | 14 tweets | 19 linkedin
Barclays Bank sets up tech venture unitBarclays Bank sets up tech venture unit
9287 views comments | 16 tweets | 22 linkedin
Goldman Sachs acquires PFM startup Clarity MoneyGoldman Sachs acquires PFM startup Clarity...
8661 views comments | 9 tweets | 10 linkedin

Featured job

Find your next job