UK-based Shawbrook Bank has joined ClearScore’s panel of personal loan providers and will offer eligible ClearScore customers a 1% rate reduction when they share their Open Banking data.
ClearScore will allow Shawbrook to combine Open Banking data with its existing decisioning technology through financial marketplace ClearScore. This will improve Shawbrook’s ability to assess creditworthiness and help potential customers.
Lenders will be able make better lending decisions by collecting real-time income, and expenditure data at the time of application. The challenger bank confirmed it will only have one-time access to an applicant’s data to make a lending decision, “in line with Open Banking principles”.
ClearScore will offer a 1% reduction in the APR on personal loans to customers who provide Open Banking information at the time of application. This offer is only available for six months, from March 2022 through August 2022.
Paul Went, managing director at Shawbrook Bank Consumer, : “The launch of Open Banking was designed to open up the market and make access to finances fairer for all. The use of transactional-level data was however left to the exclusive control of the franchise banks that 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.”
Went said that its Open Banking-backed product with ClearScore will help it to deliver a “fair” application process, and come to “faster and even more reliable” decisions.
According to research by ClearScore, using Open Banking to open up lending to just 5% of ClearScore’s underserved population would result in an additional £30 million in lending per month.
Andy Sleigh, CEO of ClearScore UK, added: “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.”