By Daniel Lanyon on Tuesday 13 July 2021
The 247 Group’s lending division, 247 Money, is the motor finance industry’s first lender to publicly confirm to using open banking data in its credit decisioning process.
CarFinance 247, the UK’s largest online motor finance marketplace, has teamed up with Credit Kudos in a new open banking partnership to help make better credit decisions.
The Manchester-based company, part of the 247 Group, will now offer consumers the option to connect their bank accounts to assess creditworthiness and affordability through its new service 247 Connect when applying for loans for car purchases.
Credit Kudos will integrate customers’ open banking data with the company’s existing risk management engine in what CarFinance 247 says is “a crucial step-change in the 247 Group’s technology and underwriting approach.”
The lender, which launched in 2006, says this will allow it to offer credit to more consumers. Open banking will not be a requirement for all consumers using the platform but rather for those not able to be approved through typical credit assessment via bureau data.
Use cases for open banking are growing, particularly among lenders hit by the destabilising effect of the pandemic on traditional credit models. Meanwhile, consumer use of open banking doubled in 2020.
Reg Rix, CEO of the 247 Group, says current methods of credit score assessment have limitations when dealing with consumers’ complex financial circumstances.
“Consumer banking data has, for too long, been solely the preserve of the high street banks. With open banking, consumers can give us permission to access that data, enabling 247 Money to offer more loans to more people.”