The FCA’s call for flexibility on mortgage repayments to support struggling homeowners highlights the financial stress many people in the UK are currently experiencing. Tink’s research shows that nearly one in four (24%) Brits have already missed, or expect to miss, a mortgage or rent payment due to the rising cost of living.

But there are ways that banks can harness financial technology to help support people in challenging economic times.

Using the transaction data held in people’s bank accounts gives banks up-to-date visibility of a borrower's incomings and outgoings, to make more accurate affordability assessments. This can help reduce the risk of defaults or missed payments further down the line.

It also gives banks a holistic insight into someone’s overall financial situation. This allows them to recognise when customers might be facing financial distress and intervene with tailored financial support.

That’s why it’s important that financial institutions harness bank account data to help them make better, more accurate lending decisions. And why banks and regulators should continue to prioritise open banking as a vital enabler of better financial services to support customers during the current cost of living crisis.