Open Banking: Bringing your data to Likely Loans

Likely Loans is now using Open Banking technology to offer personalised quotes within seconds. Here’s Open Banking explained…

What is Open Banking?

Open Banking uses cutting-edge technology to allow companies like Likely Loans to quickly and securely use your banking, transaction and other financial data provided by your bank - with your permission, of course. This can include information like your balance, income, expenses and any overdraft you may have. It was introduced to increase competition and innovation in the FinTech industry.

Open Banking works by allowing third party providers (TPP) access to your information through secure application programming interfaces (APIs). All participating third parties must be compliant with the Payment Services Directive requirements (PSD2).

Sharing data through Open Banking is simple, convenient and fast, ideal for application processes, sign ups and linking accounts. This means no need to provide evidence through traditional documents or manually inputting your financial information. A lot of budgeting and spending tracking apps on the app store already use Open Banking, so you’ve likely already experienced it.

How is Likely Loans using this?

With access to your up-to-date banking data, when you apply for a loan with us, your application is more streamlined as we can perform virtually real-time customer assessments without any lengthy analysis of your bank statements.

Your bank account provider knows exactly how much you earn and spend each month, so we’re able to paint a much more detailed picture of your financial situation to better understand your circumstances. We can use this extra data to give more personalised lending decisions.

Using Open Banking itself doesn’t affect your credit file, but we will still perform credit checks as part of your loan application’s evaluation process.In addition to using your existing credit history, we use the open banking data to conduct an assessment of your current financial health.

How do you benefit?

Open Banking gives you more power over your finances than ever before, even when you’re on the go, making everything as easy as online banking apps. Using Open Banking means that we may be able to offer you a loan that we couldn’t have previously, without access to that data. If you choose to use your open banking data with other apps, it’s also a great opportunity for you to get a clearer image of your own finances through services that are truly relevant to you.

When applying for a loan, you may have been rejected by other lenders for bad credit loans, for example not having enough history on your credit file. Open Banking data allows us to view your current account transactions, which helps us better understand your circumstances and ability to repay the loan.

Outside of loan applications, Open Banking can also be used for personal finance through:

• Budgeting tools and advice

• Spending and savings notifications

• Price comparisons

• Customised investment advice

Is it safe?

There’s no need to worry. Thanks to data protection laws, only third-party providers who are approved by you, the customer, can access your banking information and only for 90 days from the day of consent. Due to regulations, no provider (including us) can extend this, and you have every right to revoke your consent at any time.