Zopa Bank has partnered with credit score provider and marketplace ClearScore to utilise open banking capabilities for its customers.
ClearScore claims that this is the first in-market open banking integration between a credit marketplace and credit partner.
Zopa Bank was launched as a sister company to peer-to-peer consumer lender Zopa last year, after the firm was granted its full bank licence in June 2020. The digital bank launched its first-ever credit card in October 2020.
Borrowers declined for credit products elsewhere can now gain access to a Zopa pre-approved credit card, as a decision has been made using open banking which allows the neo-bank to see a wider view of their finances and creditworthiness.
By combining data held by ClearScore and Zopa’s real-time open banking capabilities, users can find out immediately if they will be pre-approved for a Zopa credit card with a personalised APR, without marking their credit file.
Zopa is the first credit card partner to go live with open banking data on the ClearScore marketplace.
Having initially rolled out the partnership with ClearScore at the end of April, Zopa has seen a 37 per cent increase in the number of applicants who are now eligible to apply for a Zopa credit card.
Within one week of the test beginning, more than 43,000 ClearScore users have seen a Zopa offer which would not have been available based on credit report data alone.
“At Zopa, we’ve used open banking technology since its inception to improve the customer experience, and now we’re using it to responsibly provide credit to people that previously may have been locked out of our products,” said Tim Waterman, chief commercial officer at Zopa.
“We’re at a crucial point in time where open banking provides an opportunity to responsibly offer products to those that need them most and who are more than eligible for credit but are currently penalised due to the financial impact of the pandemic.
“Our credit card has been completely built around the consumer, with the end result being that through Zopa’s product customers are better placed to manage their finances moving forward.
“Zopa’s partnership with ClearScore has allowed us to be able to offer our card to their huge customer base via our open banking technology, which provides us with a more holistic view of consumers’ finances.
“We’re proud to be the first credit card provider to partner with ClearScore in this way, helping more people across the UK gain access to the credit they need and a Zopa product that will contribute to improving their financial well-being in the long term.”
“Throughout the pandemic, we have seen a dramatic drop in access to credit with lenders hesitant to offer credit to people at a time of financial uncertainty and turmoil,” said Andy Sleigh, chief operating officer of ClearScore.
“We are excited to be partnering with Zopa, who are able to highlight the tangible benefits of open banking technology, unlocking credit for those who previously wouldn’t have had access to this due to having a lower credit score or mark on their report.
“We are only scratching the surface of the benefits of open banking and so it’s great to see more innovative companies like Zopa showing its potential.”