When Open Banking was first introduced, there was understandable skepticism. Why would banks make it easier for customers to share their financial data? Can organizations that have spent decades competing against each other really work together in a way that benefits everyone?
The answer, as we have seen in recent years, is that they can. Banks still compete fiercely for customers, products and market share, but they do so within a framework that allows data to flow securely and efficiently between participants.
Instead of eliminating competition, Open Banking changed where competition took place. Firms are now distinguishing themselves with better products, stronger service and customer experience, while common standards help the wider financial system work more effectively.
The home buying market may now be approaching a similar turning point.
The Government’s recent Home Buying and Selling reform sets out the ambitious vision of a faster and more transparent home buying process, improved visibility into the buying process and wider adoption of digital technology. Early access to property information, electronic identity verification and better use of digital processes should all help reduce delays and improve confidence.
However, as Open Banking demonstrated, meaningful change depends on more than new technology or regulation. It requires an industry-wide commitment to improving the way stakeholders work together.
That is no small challenge. A typical local job involves lenders, brokers, freight forwarders, estate agents, property surveyors, valuers and local authorities, each with a different divisional responsibility while working within different systems. While each participant may do their part well, handing off between them often creates unnecessary delays, duplicated effort and avoidable frustration. They come across a single task and judge accordingly, caring less about who is managing the next task than how progress is being made.
This is where the comparison with Open Banking becomes more important. The comparison is not exact: Open Banking is developed within a clear regulatory and technical framework, while real estate involves a broad mix of regulated and unregulated participants, data owners and public bodies.
The success of Open Banking has come from allowing information to flow between participants, allowing firms to remain competitive while removing unnecessary friction from the customer journey. It also showed that consumer confidence grows through the use of practical information rather than technology alone.
Early concerns focused on trust, data privacy and whether there was a real benefit, but today millions of people use Open Banking because it brings tangible improvements, from faster payments to more accessible checks and mortgage applications. The technology itself has become almost invisible.
Buying a home is likely to follow a similar pattern. Consumers are less likely to accept digital tools just because they exist, but they will appreciate fewer delays, fewer iterations and greater certainty. Delivering those results will inevitably require previously independent firms to work closely together.
That may not always make sense in commerce, but reducing friction between stakeholders is more likely to improve the customer experience than making each business more efficient in isolation.
The time between loan offer and completion shows why this is important. While large investments have greatly improved the start of the real estate journey, much of the subsequent work still relies on emails, manual handling and disconnected processes. Professionals spend more time chasing reviews, answering questions and coordinating work instead of progressing tasks, creating unnecessary costs for firms and uncertainty for consumers alike.
So the next opportunity lies in a streamlined digital workflow that allows tasks, decisions and responsibilities to flow more efficiently between participants. Essentially, that can mean guaranteed property information, outstanding inquiries and next steps move securely between agents, lenders and conveyancers without being re-locked or chased.
Rather than introducing another stand-alone platform, the focus is on reducing duplication, improving collaboration and giving all teams greater confidence that work is progressing as it should. That allows each organization to focus on the knowledge and service that differentiates it, instead of the administration that often slows down the process.
Perhaps the biggest lesson from Open Banking is that collaboration and competition are not opposites. Businesses can continue to compete on products, services and technologies while working together to remove friction from the customer journey.
If the real estate industry can’t establish that common ground, firms will remain free to differentiate between technology and service while consumers experience a job that feels like one connected journey rather than a series of disconnected gifts.
Andrew Vaughan is head of client management at e4 Strategic
