Credit Kudos and 247 Group join forces to bring open banking to automotive finance
The 247 Group loan division, 247 Money, is the first auto finance lender to use Open Banking data in its credit decision process.
Image source: Reg Rix (left) and Louis Rix (right).
CarFinance 247, the UK’s largest online car finance marketplace, has partnered with Credit Kudos in a new open banking partnership to help make better credit decisions.
The Manchester-based company, part of the 247 Group, will now offer consumers the ability to connect their bank accounts to assess creditworthiness and affordability through its new 247 Connect service when applying for a loan for the purchase of ‘a car.
Credit Kudos will integrate open customer banking data with the company’s existing risk management engine in what CarFinance 247 says is “a crucial change in technology and the Group’s underwriting approach 247”.
The lender, which launched in 2006, says it will allow it to offer credit to more consumers. Open banking will not be a requirement for all consumers using the platform, but rather for those who cannot be approved through a typical credit score via bureau data.
Open banking use cases are multiplying, especially among lenders affected by the destabilizing effect of the pandemic on traditional lending models. Meanwhile, consumer use of open banking doubled in 2020.
OBIE Ecosystem Director David Beardmore also said during the recent AltFi Finance Festival 2021 that “We are only at the beginning of the hockey stick” with the bank open.
Reg Rix, CEO of Group 247, says current methods of credit score assessment have limitations when it comes to dealing with the complex financial situation of consumers.
“Personal banking data has been the prerogative of the big banks for too long. With open banking, consumers can give us permission to access this data, allowing 247 Money to offer more loans to more people.