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Scottish Fintech Powers HSBC’s First Open Banking Loan

Brian Baglow


Castlight Financial HSBC: Categorisation as a Service open banking loans

Castlight Financial, the Glasgow-based financial capability company has partnered with HSBC UK to power the bank’s first ‘open banking loan’.

Following a successful pilot programme, HSBC UK is using Castlight Financial’s Catgorisation as a Service (CaaS) tool, to process live loans for customers.

After a customer has securely linked their bank account to HSBC UK, the bank uses its open banking technology to pull down all the transactional data.

Informed Lending Decisions

HSBC UK then runs this transactional data through the CaaS engine, which categorises income and expenditure into 155 separate types, summarising income streams, credit commitments, essential costs and discretionary spending to reveal a monthly disposable income.

This information is then merged with credit performance data and in under 10 minutes HSBC UK has all the information it requires to make a highly informed lending decision.

CaaS was able to provide HSBC UK’s underwriters with enhanced data direct from the customer’s bank account, allowing the bank to give customers a better, faster service.

Open Banking Future

Martin Leonard, Castlight Financial’s Chief Operating Officer told DIGIT: “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 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.

Wider Financial Security

“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. But for Castlight Financial we believe its also good news for the wider lending industry as CaaS, at its very heart, is a tool for ensuring that borrowers borrow safely and lenders lend safely.

“It has been hugely encouraging to work with HSBC UK and see their commitment to these important values and how quick they have been to appreciate that CaaS not only delivers solutions for their lending teams and benefits for their customers, but that it contributes to wider financial security which is a good thing for everyone.”

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Brian Baglow


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