Boom in financial tools allowing people to manage money more effectively

A boom in people using financial tools which help them to manage their money more effectively by sharing their data securely with firms has occurred during the coronavirus pandemic, according to a credit checking company.

Experian said 57% of lenders have adopted “open banking” technology in the past 12 months, helping people manage their finances in more fluid and intuitive ways online.

Open banking allows people to share information about themselves securely with providers using apps and websites, to find products and services that suit them based on their own transactions. This could help people find a better overdraft for their needs, for example.

The number of people choosing to share their data through “open banking” technology has tripled since the start of the Covid-19 pandemic, Experian said.

In February, Experian’s open data platform recorded more than 188 million data-sharing requests, up from 47 million in February 2020.

Lisa Fretwell, managing director of data services at Experian, said: “We’ve seen an incredible boom in digital financial tools over the course of 2020, especially when it comes to open banking-powered services.

“People are increasingly understanding the ways their financial data can help them manage their finances more productively. They’re increasingly calling on it to support their financial management and planning – more of a priority than ever as we face into a second year of potential economic upheaval.”

Experian launched Experian Boost in November, which allows people to voluntarily add further information about their everyday financial activity, such as Netflix or Amazon Prime subscription payments, via open banking.

It said this is helping to improve people’s chances of access to affordable credit, particularly those looking to soften the financial blow from the pandemic.