Alternative LendingDigital BankingSavings and Investment
Atom Bank and Wombat Invest are looking to improve their lending decisions and customer deposits, respectively.
Image source: Freddy Kelly/Credit Kudos.
Barely a day goes by without a host of open banking partnership announcements at the moment, and today it’s Atom Bank and Wombat Invest’s turn.
Atom Bank is partnering with Credit Kudos to better assess SME loan applications, while Wombat Invest is working with TrueLayer to enable instant open banking deposits for its customers.
For Wombat, the change already means that 82 per cent of its one-off deposits, which previously relied on card payments, are now being facilitated by TrueLayer’s Payments API.
“This doesn’t come as a great surprise,” said Jamie Morton, TrueLayer’s UK country manager. “We’ve witnessed a significant uptick in conversion rates with our Payments API, outstripping both card and alternative payment methods.”
On Atom Bank’s end, the partnership with Credit Kudos will roll out slower, starting with instant income verification and features to improve its secured small business lending, and with plans to expand the features to unsecured business lending and even residential mortgages by the end of the year.
In the future Atom Bank believes the open banking insights will enable it to lend to even smaller businesses without assets, while at the same time reducing the bank’s risk of defaults.
“Traditional credit reports are not up-to-date or extensive enough, but Open Banking data allows us to provide lenders with a real-time, holistic overview of an individual or businesses’ finances, as well as a prediction of future circumstances,” said Credit Kudos CEO and founder Freddy Kelly.
Atom Bank is planning on extending an additional £1bn of lending so some 10,000 SMEs over the next two years, and the bank says developments in open banking are core to it achieving that goal.