Credit, Collections & Insolvency News
Shawbrook Bank has announced that it has joined ClearScore’s panel of personal loan providers which will use Open Banking technology to assess the creditworthiness of potential customers.
Shawbrook intends to start integrating Open Banking data with their current decisioning technology. This will enable them to collect real-time income and expenditure information at the point of application so they can make more accurate lending decisions. In line with Open Banking principles, Shawbrook Bank will only have one-time access to an applicant’s data to make a lending decision and will not have access to this data on an ongoing basis.
The use of Open Banking data in personal loan applications is designed to help give providers access to more up-to-date information at the point of application to better inform lending decisions.
Paul Went, MD at Shawbrook Bank Consumer said “The launch of Open Banking was designed to open up the market and make access to finances fairer for all. However, the use of transactional level data remained at the preserve of the franchise banks who owned the customer relationship.”
“The ability for us to now have access to the same powerful data marks a significant turning point, allowing us to enhance our credit decisioning to directly benefit our customers. The overarching benefit to all parties is that better credit decisions are made, providing customers with the best possible decision will foster long-term and profitable relationships.”
“As a responsible lender, transparency is at the heart of our business. For us this means offering our customers suitable products to meet their needs, with a straightforward and fair application process. Our Open Banking backed product with ClearScore not only helps us deliver this, but also helps us offer faster and even more reliable decisions to our customers who want immediate solutions to their finance needs.”
“This additional data and the understanding of the data will also be a critical element in the design of new financial products to better serve our customers.”
Andy Sleigh, CEO of ClearScore UK said “By providing lenders like Shawbrook Bank with more information via our Open Banking integration, we are opening the credit market and supporting even more accurate lending decisions. The technology behind Open Banking offers a mutual benefit to both the lender, with ambitions to help better serve a growing market and consumers, wishing to access finance that suits their needs and wants. ‘
“Our research has shown that using Open Banking to open up lending to just five per cent of ClearScore’s underserved population would result in an additional £30m in lending per month – a number that could grow significantly in the following months and years as these users begin to use further forms of credit. As a result of Shawbrook Bank and other lenders adopting this technology, we expect to see further progress made to help more consumers access finance products that suit their needs.”