Shawbrook debuts better rates for borrowers who share open banking data

Challenger bank Shawbrook has come up with a unique proposition to encourage its customers to share their open banking data: better rates.

In return for sharing their open banking data, eligible borrowers will qualify for a 1 per cent reduction in the APR on their personal loans.

To qualify, borrowers have to come via ClearScore, the financial marketplace that is handling the open banking data side of the deal.

The data being collected includes real-time income and expenditure, captured at the point of application and will be used as part of Shawbrook’s decisioning.

However, crucially the data collection will be a one-time event, and there will be no ongoing access to the open banking data.

“The ability for us to now have access to the same powerful data [as franchise banks] marks a significant turning point, allowing us to enhance our credit decisioning to directly benefit our customers,” said Shawbrook Bank’s consumer MD Paul Went.

“The overarching benefit to all parties is that better credit decisions are made, providing customers with the best possible decision will foster long-term and profitable relationships.

Looking to the future, Went said open banking data would be “a critical element in the design of new financial products” hinting that today’s announcement is only the beginning of Shawbrook’s open banking journey.

By working with ClearScore to enable its open banking-powered personal loans, Shawbrook will also be listed on the marketplace, potentially opening it up to ClearScore’s 12m users.

“The technology behind Open Banking offers a mutual benefit to both the lender, with ambitions to help better serve a growing market and consumers, wishing to access finance that suits their needs and wants,” said ClearScore UK CEO Andy Sleigh.