By David Firth, Product Director at Moneyhub
Open banking has been discussed in lending circles for years, but it’s rare to hear a lender walk through exactly what changed when they used it, in their own words. That’s what we got when Admiral Money joined me to talk through the four years since they introduced real time bank data into their lending decisions. The full conversation runs to just under an hour and covers everything from the regulatory backdrop to where AI fits next. Here are the five things that stood out most to me.
Open banking affordability assessment means using a customer’s live transaction data, income, spending, existing commitments, to assess whether a loan is affordable, alongside or instead of relying solely on historic credit bureau data. That’s the shift Admiral Money made, and here’s what stood out from the conversation.
Does Consumer Duty change how lenders should assess affordability?
Consumer Duty didn’t create new work so much as it gave a name to something good lenders were already trying to do. The firms moving fastest tend to be the ones treating affordability assessment as a framework for better decisions, rather than as a tick box exercise.
Does open banking replace credit bureau data?
Credit bureau and CATO data will always have a place, but it can lag by weeks, which matters more than it used to given how quickly circumstances can now change. Admiral Money was very clear in saying that open banking doesn’t replace bureau data, the two work best together.
What’s the business case for open banking in lending, beyond approval rates?
Approval rate alone would have been enough to justify the change internally. Admiral Money built the case on customer experience, operational efficiency and fraud prevention too, several of which weren’t part of the original pitch.
In what order do the benefits of open banking lending typically show up?
Acquisition improves first. Operational savings follow once the new process beds in. Knowing that order in advance meant Admiral Money could set the right internal expectations from day one, rather than treating it as a single big bang moment.
Where is open banking in lending headed next?
The most forward looking part of the conversation was around where multi bureau data sharing, AI and open banking in collections are heading next. Governance and explainability need to keep pace with whatever comes.
There’s a lot more behind each of these, including the actual numbers behind the approval rate, the automation gains, and how success gets measured internally, in the full session.
Watch it on demand to hear me asking the questions directly to Admiral Money’s team.
About David Firth
David Firth is a pensions and wealth expert with 17 years of experience in Product. He played an important role in PSD2 and the UK’s Open Banking initiative from its conception, helping heavily regulated firms to adopt cutting edge technologies in record-time. As Product Director, gifting this flexibility and freedom to financial institutions is what David enjoys most about his role. Outside of the workplace, David is an escape room veteran, with a 100% escape record from over 60 rooms.
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