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HSBC starts using Open Banking data to assess customer affordability

  • 18/05/2018
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HSBC starts using Open Banking data to assess customer affordability
HSBC has taken a significant step into the Open Banking regime by signing a deal with a third-party software and analytics provider to allow it to launch consumer products utilising data through the initiative.


The agreement with Consents Online will mean, where permitted by customers, HSBC can tap into data from other banks and financial institutions when handling applications.

HSBC is using Open Banking data for credit applications including personal loans and credit cards initially, but intends to expand it into other areas including mortgage applications in due course.

The process involves gathering consumers’ consent to pull their current account transaction information, and then classifying each outgoing and incoming transaction according to Financial Conduct Authority (FCA) guideline categories; committed spend, basic quality of living, essential spend, and discretionary spend.

HSBC told Mortgage Solutions that affordability checks often took weeks to complete and required customers to provide three months’ bank statements, potentially posting paper copies or delivering them into a branch.

However, the new process is typically completed in around two minutes.

“There’s a relatively small number of customers using the journey now but as time goes on we’re hoping it will grow,” an HSBC spokeswoman said.

“Our intention is to roll it out more broadly to other product areas, but we don’t have a time scale on that,” she added.


Developing products

Consents Online said its data analytics platform AccountScore specialises in transaction data analytics for consumer and business lending.

It said this included developing products to help organisations better utilise data within lending decisions and make the application process smoother for customers.

Products offered by the software firm include:

  • Verify, which removes the need for manual payslips when completing financial applications;
  • Enrich, which categorises transaction data to provide more detailed insight on customers; and
  • Events, an alerts system which notifies financial service providers to events in a customer’s life which could alter their financial requirements.


Customer data control

HSBC will also use Consents Online’s consent management system which allows consumers to view and control where their data is being accessed and for what purposes, with the ability to turn it off and on immediately.

Consents Online commercial director Emma Steeley said: “Our B2B clients of different sizes, sectors and countries have demonstrated the power of transaction data to revolutionise customer insights.

“We are delighted to be helping HSBC UK with this journey.”

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