Open Banking: an Underwriter’s perspective
At LendInvest the use of Open Banking is only one of the ways that we speed up our Buy-to-Let loan application process, and ensure credit risk is minimised. We sat down with one of our experienced Underwriters to break down what it is, how it works for us and how it improves our customer experience.
For many of your customers, Open Banking may be a relatively new concept. In a basic sense, how does it work?
Open Banking is a secure way to give lenders access to your financial information. It opens the way to new products and services that could help customers and small to medium-sized businesses get a better deal.
How has the implementation of Open Banking changed/impacted your role?
I feel Open Banking supplements my role as an underwriter. Using it gives the lender secure access to banking and transaction data covering 3 years in a dashboard format which is easy to interpret and gives me a clear picture of affordability. Not having to ask for any additional documentation like payslips or a proof of deposit helps me review applications quickly.
What does Open Banking offer customers and yourself as an Underwriter?
It removes the burden for the broker and customer to provide banking information in digital or paper format. It gives us instant access as soon as the customer grants us it. From there we will have clear information presented in a dashboard which is a summeraised view of the accounts.
Does it change how likely you are to approve a loan?
We review a whole range of information to reach a decision for a loan application, Open Banking forms part of seeing that information. The dashboard information it provides gives us an up to date and clear view of the applicant and there is more information available to increase the likelihood of the application being approved.
What would you say the biggest barriers to adoption have been so far?
I think the biggest barrier to take up open banking is the perception of not understanding new technology or how it works. There is also a perception that we want to use it to find a reason to decline this application, which isn’t true, it is just a tool to speed up the process. Other barriers are concerns over giving access to information and not being familiar with the new technology and how it works. Customers are now more protective of their data and worry about this falling into the wrong hands.
What other technology would you say plays an important role in speeding up your process?
We try and use technology where possible, such as our portal where brokers input the application, where this will feed into other systems we use meaning less duplication and data entry. The use of Onfido ID to help applicants swiftly verify their identity online by uploading a photo of one identity document, coupled with a real time selfie on their mobile phone which reduces the reliance on a broker providing certified ID.
To get started on your next Buy-to-Let, get an instant quote from our Buy-to-Let page or call the team on: 020 3846 6886.