Redefining credit risk for a global audience

Open Banking has come a great distance and Open Finance is now on the horizon. DirectID's James Varga examines how DirectID impacts within these parameters.
Published on
April 8, 2021
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Finance & Fintech

It’s been a year now since the start of the pandemic and it has had a dramatic impact on all our lives.

Many industries have been significantly impacted by Covid and the world has changed for financial services.  

Open Banking, catalysed by the pandemic, is now one of the hottest topics in the industry and a far cry from just years ago when it was still being actively being doubted in board rooms.  Thanks to the huge effort from so many people, it is fantastic to see Open Banking now securely established as a global trend.   

Not only is there a need to digitise, spurred on by the closing of branches and remote working, there is now a need for more real time data.  

Having been involved recently in the FCA Digital Sandbox and having helped over 70+ companies leverage bank data, I’m excited for the road ahead. Open Banking is now a global trend with over 30 countries adopting similar programs and those already embracing it now expanding the scope to Open Finance (and one day, hopefully, Open Data).    

Most important though, is recognition of the huge potential that Open Banking Data can offer the market. Not just because of the pressures that the current pandemic has brought on businesses to use digital-first, real-time, insightful, accurate decisions (vs. historical bureau based models). Not just because regulators around the world are putting increasing pressure on the financial services industry to adopt better practices that protect consumers. And not just because now that everyone is taking about it, adopting it, and benefiting from it, you have to use it to be competitive in many sectors. 

It’s been 10 years now since we started talking about leveraging the identity and data you have with your bank account to make online interactions safer and easier. At the end of the day as consumers we want convenience when accessing products and services and as businesses, we want to increase conversion, reduce cost and minimise fraud.  

That’s what I believe Open Banking Data can bring to the market.     

Seeing momentum build around Open Finance is exciting, as well as the prospect for a model of consumer centric Open Data.  

This is what we are building at DirectID, a global and ubiquitous credit risk platform and capability delivering the most accurate credit risk data, instantly. It’s exciting to see all the hard work the team has been putting into not only our own efforts but that of the industry as a whole, come to fruition as a global trend!   

“To get credit you have to have to have had credit” is a broken model that we want to change.   

It's hugely exciting to be working with big banks, FTSE 100 companies and two of the biggest gig economy companies in the world. I'm hugely proud of the team that we have and our contributions into the world of Open Banking.   

Efficiency is through the roof and we are seeing the huge benefits in the business ourselves. Remote working while challenging definitely has its benefits and we are embracing the new ways of working. I’m delighted that we have been selected as one of Scotland's Top 10 Flexible Employers.  

As a trusted partner we work closely with our customers to really unpack the value of bank data. From onboarding, portfolio management and now into financial wellness and distress (both pre and post delinquency) and within collections & recoveries.    

For us it has always and will be around what you do with the data that counts.  

This is why we are not just building more insights such as predictive cashflow, emerging financial distress but also providing more of these engines directly to the market.   

Our goal is to redefine the credit risk lifecycle with bank data and that's what we are doing! 

You can of course keep up with all the latest news from DirectID by registering for our monthly newsletter, the Frictionless Finance Report. Packed full of the latest news on Open Banking, finance and FinTech, it has become a must-read for all in the industry. You can read the most recent edition, here.

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What our customers say

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DirectID began working with Target at the beginning of 2020 to provide open banking data for their new Mortgage Hub. It is the first digital mortgage platform to be designed from the ground up, and the first to use open banking data as the backbone for customer experience.

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DirectID began working with Target at the beginning of 2020 to provide open banking data for their new Mortgage Hub. It is the first digital mortgage platform to be designed from the ground up, and the first to use open banking data as the backbone for customer experience.

Shieldpay

Multi-award winning payment platform. Designed for highly secure & efficient transactions. Trusted by over 100 law firms, lenders and professional services.

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DirectID began working with Target at the beginning of 2020 to provide open banking data for their new Mortgage Hub. It is the first digital mortgage platform to be designed from the ground up, and the first to use open banking data as the backbone for customer experience.

Target Group

A Tech Mahindra company and a leading business services provider in lending, investments and insurance, managing over £25bn+ assets.

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DirectID began working with Target at the beginning of 2020 to provide open banking data for their new Mortgage Hub. It is the first digital mortgage platform to be designed from the ground up, and the first to use open banking data as the backbone for customer experience.

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A lending as a service provider using open banking to strengthen their credit scoring engine

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Frequently asked questions

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01

What is open banking and how does it work?

Open banking is the practice that allows people and businesses to share up to 12 months of transaction data. DirectID is regulated by the Financial Conduct Authority as an Account Information Service Provider (AISP) - the intermediary who safely facilitate this process.

02

What is transaction categorisation?

Transaction categorisation is the process of adding context to raw transaction data. The process gives you an understanding of what your customers' spend their money  and where.

03

How does bank account verification work?

Using the bank account verification API, DirectID matches the details provided from your customer to those on their account. We apply a set of sophisticated algorithms and rules to verify the name, and then tell you what does and does not match.

04

How do you verify income with open banking?

After a customer shares their data, DirectID identify recurring credits to the account and group these. Using an algorithm we identify the monthly income for each income stream. We then return the calculated income and confidence score to you.

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