Young borrowers are most up for embracing open banking
With one in five being turned down for credit, under-35s are eager for change.
Demand for open banking amongst borrowers is growing fastest among under-35s, the group most likely to be struggling to access credit.
That’s the finding of the third Credit Kudos Borrowing Index, a semi-regular survey of 2,000 UK adults by insight agency Opinium.
This latest index found these young under-35s are three times more likely to have seen their income negatively impacted by the pandemic than older people (36 per cent versus 13 per cent of the over-55s), while they are also struggling to access credit.
One in five (18 per cent) said they’d been turned down for credit over the past 12 months, versus just 2 per cent of over-55s, and the majority turned down were not told why or how to improve their chances of being accepted.
“With the pandemic hitting the younger generations particularly hard, and with many younger people having a thin credit file as they haven’t borrowed much previously, many lenders have been unable to assess them using traditional credit data,” said Credit Kudos CEO and co-founder Freddy Kelly.
“But this doesn’t necessarily mean they can’t afford to repay. Open Banking allows lenders to get a true picture of someone’s financial health and make a more informed decision and, in less than a year, our data has shown a marked increase in demand among borrowers for this technology.”
Indeed since last April, Opinium measured a 21 per cent jump in under-35s’ willingness to share their bank transaction data if it could help them get accepted for a loan.