Sunday, June 23, 2024

How Open Banking is helping to make better lending decisions

Oakbrook Finance, parent company of Likely Loans, has become the first UK lender to offer a fully automated Open Banking lending decision via a third-party aggregator. Teaming up with a leading data analytics provider, Oakbrook Finance is using open banking data to improve lending decisions through a better understanding of a customer’s financial circumstances.

What’s Open Banking?

Open Banking is a secure way for authorised providers like Likely Loans to access your bank transaction data including spending habits, regular payments and income, all with your permission. This cutting-edge technology is designed to encourage and allow competition and innovation to financial services leading to more accurate lending decisions. Many budgeting apps and spending trackers already use Open Banking. 

What Are the Benefits?

When applying for a Likely Loan, applicants can consent to share their up-to-date bank transaction data using Open Banking. In addition to regular credit bureau data, Likely Loans use this data to create a richer, more detailed profile of consumers and their application.

There are many reasons why someone might not have a perfect credit history, this could include those on zero-hour contracts, and the young, straight out of education. Sometimes these applicants may find it more difficult to get accepted for credit if the lender is looking at historical credit bureau data in isolation. Open Banking means that lenders can access a more accurate view of your personal circumstances.

What Is Oakbrook Finance Doing?

Open Banking means Oakbrook Finance can offer personalised loans that wouldn’t have been possible previously.Oakbrook CEO Luke Enock explains: “Our vision is to change lending for the better, and a key component of that is going to come through the accelerated adoption of Open Banking solutions across different channels.

You can read more about Likely Loans and Open Banking here. 

Conclusion

Open Banking may just be the future of the financial industry, and the world can expect more and more innovative products to use this technology going forward.

Sam Allcock
Sam Allcockhttps://www.abcmoney.co.uk
Sam heads up Cheshire-based PR Fire, an online platform that has already helped over 10,000 businesses to grab widespread media coverage on their news at an extremely accessible price point.

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