Faster, fairer lending: the role of open banking in auto finance

Speed has always been a commercial advantage in auto finance, but it’s no longer enough. As well as responding quickly, lenders need confidence that the data they’re using reflects a borrower’s actual financial position in real time.

Traditional affordability checks were dependent on payslips, credit bureau reports, or document uploads. This meant they often fall short in a world where incomes are variable, outgoings are rising, and consumer expectations for digital-first journeys continue to grow. 

Why real-time affordability is essential

Auto finance is under pressure from multiple sides. Consumers increasingly expect faster, digital approvals, often within minutes. At the same time, affordability regulations are tightening, and economic volatility is making it harder to assess risk using historic or inferred data alone.

What’s becoming abundantly clear is that legacy processes are showing their age. Asking customers to upload bank statements creates friction and dropout risk. Payslips don’t capture income nuances, especially for self-employed or gig economy applicants. And credit bureau files, while valuable, reflect financial history rather than current circumstances.

These blind spots manifest in everyday outcomes:

• Consistently earning gig workers flagged as high risk
  
  

• Customers approved despite being financially overextended
  
  

• Drop-offs mid-journey due to burdensome document requests
  
  

The solution is better inputs. That’s where Open Banking data plays a pivotal role.

The value of open banking data in auto finance

With consumer consent, Open Banking provides access to real-time, categorised transaction data across income, expenditure, assets, and liabilities. For lenders, this means building a far more accurate, dynamic view of an applicant’s financial reality, often within seconds of application.

Here’s what that unlocks:

• Income verification in real time
  Go beyond gross salary to understand income types, consistency, and frequency. This is crucial for assessing affordability in today’s portfolio-earning economy.
  
  

• Detailed expense categorisation
  Understand fixed commitments, priority bills, and high-cost credit exposure at a glance. Structured data supports more tailored underwriting decisions.
  
  

• Multi-account visibility
  Aggregate insights across all consented accounts, revealing financial behaviours that are otherwise fragmented or hidden.
  
  

For many lenders, this data now supports both straight-through processing for low-risk applications and faster escalations for those requiring referral, which strikes the right balance between automation and oversight.

Meeting new expectations in the car buying journey

The car buying journey itself is changing too. Research shows six in ten consumers are open to multiple vehicle options when they begin the process, and many compare dozens of models online before committing. Over 60% now favour a fully digital buying experience, with nearly half comfortable purchasing entirely online.

In this landscape, any delay—especially in financing—creates an opening for competitors. Lenders that can deliver a confident credit decision early in the process are more likely to retain the customer and influence their final choice.

Open Banking helps streamline that experience. It removes the need for applicants to hunt down PDFs or switch channels to share documents. It reduces dropout risk by keeping the journey frictionless. And it supports smarter decisions, even in cases that don’t fit the standard profile.

Embedding intelligence into lending workflows

Critically, the value of Open Banking data doesn’t lie in access alone. It also depends on how well it integrates into existing credit workflows. Lenders need data that is:

• Categorised and decision-ready
  
  

• Delivered via low-friction APIs
  
  

• Compatible with existing risk and operations frameworks
  
  

• Compliant with regulatory and audit expectations
  
  

When structured properly, real-time affordability insight becomes an enabler of both speed and governance. It empowers automation without sacrificing oversight and gives credit teams the clarity to act quickly—with confidence.

Looking ahead

As digital car buying accelerates and consumer financial lives grow more complex, the ability to make fast, responsible lending decisions will increasingly hinge on real-time, accurate data. Open Banking offers lenders a way to move beyond the trade-off between speed and quality, delivering both in a single, streamlined process.