Credit institutions are increasingly considering assessing solvency more accurately, quickly, and fairly. The classic approach of questionnaires, certificates, and calls to the accounting department can no longer keep up with the pace of the modern world. People want to receive decisions in minutes, not days.
Open banking comes to the rescue at such moments—a technology that changes the game’s rules. Integrating such solutions into existing platforms plays a vital role in digital transformation.
One of the leaders of this movement was TIMVERO, which realized the potential of open banking in its timveroOS system. The universal platform provides innovative, flexible, and fast lending tools.
What is Open Banking and How Does it Work?
Open Banking allows clients to share their banking data with other financial institutions quickly, safely, and completely under their control. The system connects to client accounts via API and analyzes cash flows, expenses, regular receipts, and behavior patterns.
This opens up an entirely new level of transparency. The financial institution receives a dry credit history and a complete picture of the client’s life. At the same time, the user’s consent is mandatory—no intrusion or data leakage, which is also an important indicator.
The integration of open banking helps banks and MFIs make decisions based on real figures, not assumptions. Thanks to such innovations, loan refusals that depended on an insufficient certificate or an accidental delay are a thing of the past.
How Client Assessment Changes
Previously, solvency was determined by a standard set of parameters: salary, credit history, and ownership. Now, such data is not enough. One person with a small income can be an ideal borrower, while another with a six-figure salary can be a problem client.
Open banking provides access to data that was previously unavailable. The system sees income and the stability of receipts, expenses by category, and regular transfers. Such information allows you to calculate risks more accurately and select comfortable conditions.
Such accuracy is vital for both the client and the company. The business reduces the likelihood of defaults, and the user receives conditions corresponding to their real capabilities.
Benefits of Open Banking for Credit Decisions
Modern application processing platforms already include tools for analyzing behavioral and transactional data. This makes the process of issuing loans much more innovative and flexible. Credit institutions can get the following opportunities thanks to open banking:
- detailed analysis of expense categories;
- forecasting financial stability;
- assessment of income regularity;
- instant verification of bank transactions;
- identification of hidden payment risks;
- individual approach to conditions;
- automation of scoring without questionnaires.
Such tools are essential in mass lending and microloans. Manual analysis becomes a brake in the face of the need for quick decisions. Open banking provides instant results based on live data.
Conclusion
Open banking integration is a technological trend and a logical step forward. People are becoming digital, and financial services should be the same. Companies that are the first to implement these products will gain a competitive advantage and a substantial and long-term connection with the client.
Solutions like those offered by TIMVERO give a superb chance. They combine technology, security, and customer care in one product.
