Open Banking is a process among financial institutions and service providers that helps them provide better services to their customers.
The process is a carefully planned and regulated system that ensures better customer satisfaction and faster financial analysis.
Open Banking is also what helps us analyse financial profiles and provide affordable loans to workers with potentially low credit scores.
With our Open Banking-based affordability assessment, we provide lending services that focus on “more than your score” as we impartially analyse your financial history and spending habits.
Our assessment does not depend on your credit score for loan approval. This means you don’t have to worry about having a compromised or a low score to apply for our loans.
In this article, we’ve brought you the beginner's guide to Open Banking and everything that it entails.
Open Banking Explained
Open Banking refers to the process of sharing the consumer’s financial data across different regulated financial service providers. Open Banking allows regulated third party financial service providers (like Salad Money) to access consumer information for various purposes.
Don’t worry though! This doesn’t happen without your consent and the service is regulated by the FCA, allowing you to safely share your data. Open Banking is used by financial service providers to analyse your financial history and suggest suitable products and services.
The information shared is an overview of your financial footprint and is intended to create a faster and easier user experience.
Here’s the information that is usually shared through open banking:
- Account Information
- Account Holder’s Name:
- Account Type: Savings A/C / Current A/C
- Currency: Pound / Euro / Dollar
- Account Opening Date: DD/MM/YYYY
- Transaction History: Merchant Name / Transaction Amount
How Does Open Banking Work?
Open Banking service providers simply execute the process with the help of application programming interfaces or APIs. In simple words, An API is a type of software interface that allows two computers or software to share information.
It is almost impossible to access APIs, as they are secured to industry standards to ensure a safe exchange of data.
They require several technical and user authorisations along with the user’s consent before they are shared with selected third parties like Salad Money.
Open Banking Benefits
Open Banking opens up a range of opportunities for both businesses and consumers to expand their horizons and be introduced to new services.
Let us explore some of its benefits to businesses:
How Open Banking Benefits Businesses
Financial service providers and banks can use the opportunity to improve their services and attract new customers.
Furthermore, small businesses can grow with increased opportunities to borrow and expand their businesses with the help of various third-party financial service providers.
Better Accessibility And Opportunities
With the help of Open Banking, independent financial service providers can access consumer data that was once only accessible to banks.
This provides them with the opportunity to design new products to enhance their customer base and provide better services.
Open Banking ensures a faster and easier exchange of consumer information with the help of digitalisation.
This helps businesses improve efficiency and serve their customers in a much better way, which in turn increases their customer base.
How Open Banking Benefits Consumers
One of the biggest benefits of Open Banking is its convenience. Due to the introduction of this fast process, consumers can conveniently pass on their information to various financial institutions to acquire their services.
More Personalised Services
With an easier and more accessible way for businesses to acquire consumer information, customers benefit from more personalised services.
Open Banking providers have created an extremely cost-effective process for consumers to share their details and get the best services.
For Fair And Affordable Loans, Choose Salad Money
Now that you know all about Open Banking, you can apply for our fair loans where we use open banking to provide you with credit that focuses on “more than your score”.
Whether you have a poor credit history or a bad credit score and you're working, you don’t have to worry anymore.
With our simple and fair affordability assessment system, you can get the best loans for all your financial needs without impacting your credit score.