HSBC in open banking loan first thanks to Glasgow’s Castlight Financial

Glasgow-based Castlight Financial has partnered with HSBC to help deliver the banking giant’s first “open” banking loan.

Following a test and pilot programme, the bank has used the fintech firm’s categorisation technology tool to process a live loan for a cus- tomer, allowing them to purchase a car.

After the customer had securely linked their bank account to HSBC UK, the open banking technology was used to pull down all the transactional data.

The bank was able to run the customer’s transactional data through the tool, which categorised income and expenditure into more than 150 categories, summarising income streams, credit commitments, essential costs and discretionary spending to reveal a monthly disposable income.

That information was then merged with credit performance data in order to make a rapid decision on lending.

Martin Leonard, Castlight Financial’s chief operating officer, said: “The open banking team at HSBC UK have been quick to recognise the ways in which the new world of open banking can deliver added value to their customer base.

“We are, of course, delighted that our Caas [catgorisation as a service technology] will be instrumental in allowing the bank’s lending teams to deliver fast, accurate and insightful decision making and ultimately an enhanced customer experience. With the implementation of the Caas technology, HSBC UK’S lending team and underwriters will have unprecedented insight into a customer’s financial wellbeing at the touch of a button.

“We believe it’s good news for the wider lending industry as Caas is a tool for ensuring that borrowers borrow safely and lenders lend safely.”