Render: An open banking enabled decision engine

Render emerged from the vision that credit should be made more accessible. Indeed, to many people slip through the cracks in regards to get a fair access to credit. Most of the time impacted by their credit score. And the reason, is that Lenders are struggling to understand applicants that are off the beaten tracks.

At Render we have the conviction that this can be avoided. Thanks to open banking, we can now integrate personal transaction data into one borrower’s analysis, and effectively generate a better underwriting decision when added with credit bureau data (CRA).

Based on its experience, Render unveil the positive aspects generated from the use of open banking both for the consumer, and the lenders.

What is open banking? And why does it make a difference?

Open banking allows (with the consent of its customer) any third party providing a financial service to have access to its customers banking transactions. Open banking is a term that came up in 2016 when the revised Payment Service Directive (PSD2) entered into force, with the purpose to update and enhance the previous law in place since 2007. The main objective behind thePSD2 is to support innovation and competition in the retail payments and enhances the security of payment transactions and the protection of consumer data.

Therefore, this brings over a completely new set of data available to service providers. And especially for lenders. This is when enter Render

The end of old fashion processes

Open banking is the final piece enabling 100% digital experiences in the financial services industry. This is the end of long and tedious credit application for the consumers. Remember in the past, a borrower would have had to submit a form alongside which he would have attached a dozen supporting documents (sometimes hard to get), to get an analysis started.

Leveraging open banking, Render lowers the application time to 5 minutes. This is the only amount of time needed by an applicant to give consent and grant access to his bank accounts, through an embedded (and customisable) open banking funnel. Needless to say that the accuracy is excellent, since it comes directly by API calls from the bank. No more back and forth to get the right document, or bothering chasing the applicant for clarification questions.

Putting together CRA and Open banking data Render allows decisions on factual, comprehensive, and recent data. Especially when it comes to detect vulnerability and possible financial stress points, while analysing the applicant’s behaviour under similar situations. Leading lenders to offer loans with confidence towards their customers, at the best rates while making sure they will be able repay.

New piece of information

As Open banking brings in a new standard for loan applications journey, it is also true on the decisioning side. Having all transactional data directly coming from the banks delivers certainty, and reassurance on the quality of the applicants’ documents. It is known that data submitted by loan applicants when filling out their applications is often incorrect. There is evidence that borrowers overestimate their living expenses, which is a risk when lenders needs to assess the borrower’s affordability. Render let you have an income verification thanks to open banking, aside detecting fraud tentative or identify falsification. Open banking also let you cross check credit bureau data and increment it while detecting any hidden debt such as undeclared loans or catching BNPL or payment holidays that may be absent from the credit file of the applicant. For all these reasons open banking makes a great complement of credit bureau data.

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It’s the perfect time to review your origination process, create clear digital transformation goals and implement technologies that can speed up your decision cycle and drive down costs. Thinking about what you are positioned to do exceptionally well in-house and finding or expanding partnerships to help automate elsewhere could be the key to implementing time-saving and best-in-class operations. We’re here to help.

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