The Open Banking solution is supported by a service provided by Experian, which will allow customers the option to provide their bank transaction data to Bluestone within minutes, thereby significantly reducing mortgage processing times.
Peter McGuinness, CEO at Bluestone (pictured), told Mortgage Solutions that the pilot will be rolled out to a group of seven individual brokers from different networks on Bluestone’s panel, with a national launch expected between four and eight weeks.
Open Banking is the directive driven by the UK competition authorities, requiring major banks to provide access to their customer’s transaction information to trusted counterparties.
Subject to a customer’s informed and on-going consent, this information can then be used to provide tailored financial products and assess affordability and other borrower characteristics.
With this move, Bluestone has become the first specialist mortgage lender in the UK to incorporate the service as part of its core underwriting process.
Change landscape
McGuinness said Open Banking will change the landscape for specialist lending, particularly in areas of affordability assessment and expenditure patterns.
He added it could also remove much of the friction associated with a traditional mortgage application process.
He added: “We’ve made a significant in-house investment in our IT platform through 2018 with a constant drive to improve the application journey for our advisers.
“We see Open Banking as compelling; it will provide our customers and their advisers with a significantly more efficient credit application process and give Bluestone access to high quality and timely information from which to support a mortgage approval.”
Tom Blacksell, managing director of B2B at Experian, said that Open Banking has the power to help people who have found it difficult to prove they can afford a mortgage, perhaps because they are self-employed or a contractor.
He added: “Experian’s service automatically categorises consented bank account data, so that lenders can assess how much they have coming in and going out each month, all in just a few seconds.
“Putting this information at the fingertips of Bluestone helps them to make more informed lending decisions in a much shorter time frame. It’s a great example of how the insight from Open Banking can increase financial inclusion and help people to access more affordable services.”
In November 2018, Bluestone launched an API-driven integrated mortgage application service with specialist mortgage brokers CLS Money, following the integration with Twenty7Tec’s ‘Mortgage Apply’ in the end of 2017.
