Open Banking Will Revolutionise Lending. Here’s How
- 27.01.2021 03:15 pm
LikelyLoans.com has become the first UK lender to provide a fully automated Open Banking lending decision via a third-party aggregator using a market-leading data analytics provider. But what exactly does this mean for the future of lending?
The role of Open Banking in Fintech
Open Banking is already transforming the Fintech industry for the better, allowing companies to securely use your banking, transaction and financial data like never before to create new, cutting edge financial products and services from providers regulated by the Financial Conduct Authority (FCA).
With the customer’s permission, their data can be shared with websites and apps to create more personalised experiences like you may have already seen with budgeting and spending trackers on the market. It’s also used to collect all your financial data in one place for a more comprehensive understanding of your finances.
How Open Banking will transform loan decisions
In the past, applying for a loan, especially with difficult financial circumstances, has often led to rejection. This is because it uses traditional affordability assessments and historical data that is often old and out-of-date, and in the case of the young and those on a zero-hour contract, it simply doesn’t reflect a customer’s current financial position.
With Open Banking, lenders have access to additional, up-to-date banking data that allows the lender to paint a richer, more detailed and current profile of the applicant. With this new profile, loan providers can offer more personalised lending decisions to their customers.
What Oakbrook Finance is already doing
LikelyLoans.com is changing the way it assesses loan applications by using Open Banking data. Their new journey makes it easy for consumers to consent to share their bank transaction data. LikelyLoans.com customers are now able to receive pre-approved offers that might not have been available previously thanks to this source of up-to-date data.