Open banking

Open banking lets an applicant connect their bank account to a lender, with their explicit consent, so that balances and transaction history can be read directly rather than reconstructed from uploaded statements. In Europe the legal basis is PSD2; equivalent frameworks exist elsewhere.

What it changes for underwriting is the quality of the input. Instead of a declared income figure, you see salary credits arriving on the same day each month. Instead of a claim about outgoings, you see standing orders, gambling transactions, or repeated cash withdrawals - the markers that actually predict trouble.

Consent is time-limited and revocable, and the data belongs to the customer. That is a compliance requirement, and it is also the reason applicants tend to accept it: the alternative is emailing three months of statements to a stranger.