The ClearScore Group launches Open Banking services business for UK lenders

UK-based financial marketplace The ClearScore Group has launched an Open Banking and data insight unit, offering UK lenders Open Banking connectivity and transaction categorisation intelligence.

Justin Basini, CEO and co-founder of The ClearScore Group, said its lender partners will be able to use the data to better manage their risk and identify borrowers “who might otherwise have been screened out due to credit score data”.

The new B2B business unit, called D•One, has been built on the group’s acquisition of Money Dashboard, which closed in early 2022.

D•One’s Open Banking services comprise two products that can be used independently or in combination: ‘Connection•One’ and ‘Category•One’.

Connection•One, which provides Open Banking connections to 46 financial institutions, powers a client’s Open Banking sign-up and authorisation process. It can be white-labelled or fully managed by D•One.

Category•One is described by the group as “an advanced transaction categorisation engine which allows clients to classify and analyse bank account transactions” and is based on more than one billion transactions having been categorised.

Basini said: “We believe that the future of lending decision making will be the combination of a range of data to make better decisions.

“There is a huge opportunity for lenders to use Open Banking to enhance the underwriting process by identifying financial behaviour that materially splits risk within credit score bands and allows more accurate affordability assessments.”

D•One has identified a range of financial behaviours that enable lenders to ‘split risk’ – in other words, more accurately categorise the riskiness of borrowers. This could include behaviours such as making deposits to a savings account.

Reducing barriers to entry

Tim Kelleway, director of D•One, said that the risk landscape for lenders has changed.

“While the use of alternative data in underwriting is still in its infancy, it will become a critical capability over the next few years,” he added.

“Our aim is to drastically reduce barriers to entry for lenders in adopting Open Banking across their platforms and acquisition channels.

“Our services are fully optimised to specific lender needs, such as the ability to verify income, accurately assess essential expenditure, and identify clear indicators of lending risk – all delivered through a modern and highly performant tech stack.”

The ClearScore Group launched in July 2015 and now serves more than 18 million users across the UK, South Africa, and Australia.