Embracing Open Banking: Four reasons why housing associations need to add it as a payment option for residents

In an era of rapid technological advancements, open banking has emerged as a game-changer in the financial industry. While its benefits are widely recognised by banks and fintech companies, housing associations should also take note of the transformative potential it holds. By embracing open banking as a new payment option, you can enhance convenience, improve financial inclusion, and streamline operations, ultimately benefiting both your residents and the organisation.

1. Enhanced Convenience

Without needing to populate information fields, residents can make rent payments directly from their bank accounts, automate recurring payments, and receive instant notifications, making the entire payment process more convenient and efficient. Open banking also allows residents to securely and easily share their financial data with housing associations, if required, to eliminate the need for manual processes, such as providing paper-based bank statements or physical proof of payment. This can be particularly useful if the tenant is in need of financial advice on how best to budget based on their income and spending patterns. 

2. Streamlined Operations

Implementing open banking as a payment option can streamline the operations of housing associations. By integrating open banking APIs into existing systems, manual reconciliation processes can be automated, reducing errors and saving valuable staff time. Real-time access to financial data allows for more accurate financial planning, forecasting, and reporting. Additionally, open banking can facilitate faster payment processing and improve cash flow management for housing associations, contributing to more efficient operations overall – payments are received into the landlord’s bank account either immediately or the next banking day (depending on how the tenant pays). 

3. Enhanced Security and Data Protection

Open banking is built on robust payment security protocols, ensuring the protection of sensitive financial data. By taking payment cards out of the equation, housing associations improve security and remove risk of fraud for their residents. 

4. Benefits to your Housing Association

Offering open banking payments to tenants can also bring significant financial benefits to housing associations. Firstly, open banking offers housing associations a cost-effective alternative to standard card payments, enabling them to save on card transaction fees and processing costs whilst improving convenience and security. It can also help reduce administrative costs by streamlining payment processes, saving time and resources, allowing staff to focus on more value-added tasks.  

Open banking presents housing associations with an opportunity to transform their payment processes and enhance the overall resident experience. By embracing this innovative payment option, housing associations can improve convenience, foster financial inclusion, streamline operations, and enhance data security. It is crucial for housing associations to stay ahead of the curve and consider open banking as a valuable addition to their payment options, ensuring they meet the evolving needs and expectations of their residents in an increasingly digital world.