Our 2022 Business and Consumer Insight Report has shown that 94% of Dutch businesses have already invested, or are planning to invest in Open Banking. One of the main reasons for this is that consumers are becoming more willing to share their data – on the condition that businesses offer assurance of data security and can demonstrate the value of sharing data. Our research shows that businesses are investing in the right technology tools to address consumer concerns and business challenges.
The report reveals that almost half of Dutch consumers (49%) are worried about their financial situation. The concern is compounded by the high level of economic uncertainty we find ourselves in – including inflation due to global supply chain disruptions and geopolitical instability. To cope with the rising cost of living, 28% of Dutch consumers are borrowing more than before.
“Data is extremely important to enable businesses to make better informed decisions based on insight, helping to improve the service provided to customers during these difficult economic times.” – Malin Holmberg, CEO Experian EMEA & APAC
To better support customers, companies have invested in Open Banking. This improves the accuracy of credit risk management and gives consumers and small businesses fairer access to credit. This allows companies to borrow responsibly. More than half (52%) of Dutch companies see great value in their Open Banking projects. In-depth transactional data allows companies to better assess the creditworthiness and affordability of new applicants and ensure that more accurate decisions support lending. Globally, 49% of consumers are willing to share this transaction data from their banking app, up from 43% in 2021. Among Dutch respondents, the figures were the same.
Consumer consent is key
Dutch consumers will share their data, but concerns around privacy and data use remain and consumers becoming more choosy about the companies that manage their finances. Businesses must clearly explain the advantages of sharing their data and reassure consumers how their data is protected to avoid losing these potential consumers. Consumers’ willingness to share data unlocks opportunities for businesses. Data can be turned into actionable insights that enable companies to improve their performance and provide a better and more personalised customer experience. In turn, enhanced customer experience is likely to further encourage consumers to share data.
Speed and convenience are becoming increasingly important to consumers. More than half of the surveyed Dutch consumers (53%) who were unlikely to share their data were willing to do so if it guaranteed a faster application process. By including benefits in the application process businesses can improve the speed of lending decisions and take advantage of the increased depth of data from consumer-consented financial information. An easy application process is now one of the most important factors when choosing a company for a loan or credit card.
Technology to improve customer experience
Businesses are leveraging Open Banking across a wide range of use cases to improve multiple aspects of their operations. One of the top priority use cases is that of risk assessment. This was highlighted by 66% of the Dutch Financial Services and Telecoms firms surveyed in our latest research. This is where transactional data from Open Banking can be especially powerful. Instead of relying on a bureau-based score to access the creditworthiness or affordability of a potential customer, businesses can now use transactional data from Open Banking to develop their own standalone risk assessment score. By combining data sources, businesses can build a much stronger risk assessment model than is possible with only a bureau-based score. Transactional data provides detailed insight into each customer and is extremely valuable in assessing risk throughout the customer life cycle.
In the next 12 months, fraud prevention and customer experience are the top priorities. Therefore, companies are investing in technology in these areas to tackle increasing forms of fraud while digitising the customer journey. Investments are also being made in advanced analytics, such as AI, ML, and Open Banking. These are being deployed across all business functions to streamline the customer experience and improve the performance of critical operational processes. Deploying advanced analytics capabilities was the key objective for Dutch companies over the next 12 months. This shows the importance of AI and ML in improving operational performance.
Almost half of companies in the Netherlands (45%) are increasing their Advanced analytics budget, while 65% of Dutch companies consider it a top priority to invest in better fraud protection. The survey also shows that more than half (52%) of Dutch companies will increase their fraud prevention budget next year. Cybersecurity was cited by 46% of Dutch respondents as a top technological priority for the next 18 months.
“The complex and uncertain nature of today’s economic landscape has created new challenges for consumers and businesses. To combat these obstacles, businesses are increasingly committed to technological solutions – such as analytics, Open Banking, AI, and ML – which they see as central to creating a better customer experience, more accurate decisioning, and a safer service for the customer.” – Veronica Flyckt, Director Experian Netherlands
It is no exaggeration to say that we are entering a new era of business services. The shift to Open Data will enable Financial Services and Telecoms businesses to exceed customer expectations and interact with unprecedented levels of convenience and simplicity. Enjoy the global interactive summary here.