Despite the rush to digitisation, many lending companies still rely on processes that are fundamentally outdated, comprising of paper document verification and manual assessments.
This tends to be inefficient, expensive and time consuming. The need for manual intervention during the credit risk assessment period can create operational issues within the business and hinder the ability to process applications.
Leveraging bank data allows for the removal of offline processes that slows the efficiency of underwriting departments.
When the data is available through digital statements, the efficiency of data analysis increases, resulting in higher capacity for application processing.
Fraud risk is greatly reduced as direct access to bank data is supplied, reducing the operating time and costs associated with managing fraud. Ultimately, decision times can be decreased by using insights, gleaned from Open Banking, and the operational efficiency of underwriting departments is improved.
By connecting a customer’s bank account through Open Banking, assessors are immediately presented with the customer’s bank statement information. With DirectID, key information such as income, outgoings - categorised and classified - are all visually tabulated for a business to see. This lowers operational costs and allows for any business to make more informed decisions, faster.
A consumer lending disrupter were seeking a solution to one of their upmost pain points: the requirement for customers to send in paper statements before they can commence the underwriting process.
With DirectID, they can now connect to an applicant’s bank account to verify identity and review live bank statement transactions in just a few seconds. Real-time, certified bank statements, coupled with bank-verified identities, gives the underwriters better insight into which applicants are creditworthy in a fraction of the time.
- DirectID Connect
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Customer convenience has been the key to success for many of the technologies that have become commonplace. Look at plastic overtaking the cheque, and increasingly, cash. Contactless replacing chip and pin. It’s this premise that will determine the future success of Open Banking. If it offers consumers the opportunity to do more with their finances; more conveniently, faster and cheaper, then it will become the norm.
Thanks to DirectID, we’ve been able to scale our business loan service outside London and start making loans across the United Kingdom.
CEO, Fair Finance
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