ClearScore launches open banking-based service for lenders

ClearScore is launching a new B2B business unit to help UK lenders use open banking data to make better lending decisions.

Following the acquisition of Money Dashboard last May, the new unit, D•One, is set to help ClearScore’s financial partners “accelerate consumers’ bank data into mainstream lending”.

D•One’s open banking services consist of two products,  ‘Connection•One’ and ‘Category•One’, which can either be used individually or in combination.

‘Connection•One’ provides a “comprehensive” set of open banking connections in the market to 46 financial institutions and powers the open banking sign-up and authorisation process.

‘Category•One’ is an “advanced transaction categorisation engine” that allows clients to classify and analyse bank account transactions.

"We believe that the future of lending decision making will be the combination of a range of data to make better decisions,” ClearScore CEO Justin Basini said.

“There is a huge opportunity for lenders to use open banking to enhance the underwriting process by identifying financial behaviour that materially splits risk within credit score bands and allows more accurate affordability assessments.” 

According to ClearScore, the combination of both services has enabled D•One to identify a range of financial behaviours, offer the ability to ‘split risk’ and more accurately categorise borrowers’ risk.

Lenders can then use this information to identify less risky potential borrowers.

"Through D•One we can help our partners both manage their risk more effectively and increase their addressable market by identifying users who might otherwise have been screened out due to credit score data," Basini added.

Through D•One, lenders should be able to better identify good borrowers that might typically be declined.

“Our aim is to drastically reduce barriers to entry for lenders in adopting open banking across their platforms and acquisition channels,” D•One director Tim Kelleway said.

“Our services are fully optimised to specific lender needs such as the ability to verify income, accurately assess essential expenditure, and identify clear indicators of lending risk – all delivered through a modern and highly performant tech stack.”