Several peer-to-peer lending platforms are looking at adopting open banking, as the data-sharing initiative gathers pace in the sector.
Kuflink is working on implementing open banking for real-time borrower verification, payments and to improve processes, while Lendwise is looking to use it to help assess creditworthiness.
Invest & Fund and Simple Crowdfunding have also expressed interest in the scheme, which uses APIs to open up consumers’ financial data to third parties.
Meanwhile, new P2P consumer lending platform Plend is launching with the requirement that borrowers and investors both opt in to open banking.
Read more: P2PFN‘s special report on open banking
It plans on using it for credit scoring, fraud prevention, verifying information quickly and collecting payments faster.
“The potential of open banking is huge; it can’t be understated,” said Helen Child, co-founder of Open Banking Excellence, an industry community that looks to raise awareness of the data-sharing initiative.
“By laying the foundations for better affordability assessments and improved credit risk management, it allows P2P lenders – and indeed all lenders – to further extend their services to existing customers, attract new customers and grow their businesses more profitably.
“I think lenders and P2P platforms are well aware of the benefits that open banking brings into play. Many have been watching how the open banking movement develops, and now that their customers are getting to grips with it, and becoming more comfortable with sharing their data, I expect more and more lenders to get involved.”