If you’ve recently applied for a Transave loan you may have been asked to share certain bank account information through Open Banking.
Open Banking is a term used to describe a set of technologies and standards which allow you to safely and securely share your banking transactions with a regulated third-party provider such as Transave. Importantly, Open Banking connects directly with your bank, meaning that we will never have access to sensitive information like your user names or passwords and will never ask for them.
Transave will however ask for your consent to access your transactions when you sign up to Open Banking and will then send a request to your bank, which will process it and share your details (you can withdraw your permission at any time). In theory you’ll be able to share your data for any ‘payment account’ you hold including current accounts and credit cards, although the initial roll-out of Open Banking is just for current accounts.
So why might Transave need access to your banking transactions? It’s because although we carry out credit and affordability checks on all loan applications, we sometimes require a more comprehensive overview of your finances to allow us to properly assess your creditworthiness and suitability for a loan. For example, this could be because it’s your first application for one of our loan products and you don’t have a repayment history with us. Or alternatively you may have a ‘thin’ credit file with minimal credit history, which has adversely affected your credit rating.
What all this ultimately means of course, is that Open Banking technology provides Transave with an important additional method of ensuring that we don’t unnecessarily exclude members from credit, whilst still acting as a responsible lender.