Open Banking provider Yolt has collaborated with European SME lending platform October to improve the credit assessment process for SMEs in five European countries.
The deal will see October use Yolt’s AIS to replace pdf-based bank statements with real-time Open Banking data in France, Italy, Spain, the Netherlands and Germany.
Through the collaboration, October said its customers will be able to link their bank accounts at the point of application, providing it with access to “a broad profile” of a business’ affordability and credit worthiness.
October has been using non-standard data in the credit underwriting process since 2016 and has already financed thousands of SMEs to the value of €860 million in France, Spain, Italy, the Netherlands and Germany.
Nicolas Weng Kan, CEO of Yolt, said: “We’re confident this collaboration will help to improve the lending experience for SMEs, providing broader credit options quickly and accurately. This does not only make the credit application process faster and more transparent, but also fairer.
“With Open Banking, businesses have control of their own financial data, and it provides an easier way to verify income and demonstrate creditworthiness.”
October CEO Patrick de Nonneville added that while it invests in its own technology, the company will “opt to buy when it’s more efficient”.
“For example, given the importance of bank transactions in our scoring and the current low level of Open Banking adoption by SMEs, we’ve built our in-house pdf extraction systems; but as this adoption improves, we aim to switch to direct connections as much as possible,” he said.
“Yolt’s strong European coverage corresponds to October’s European footprint and enables European SMEs to link their bank accounts, so that we can assess a broader profile of credit worthiness and speed up our decision process even more, supporting our mission to finance businesses better.”
On average, Yolt makes 25 million API calls a week and in December last year it was granted a PSD2 license from the Dutch central bank, meaning that it can independently offer Open Banking services across the EU.