Credit Kudos is today announced as one of the key Fintechs working together with PwC to build the digital banking ecosystem sandbox platform – a PwC project to demonstrate the ease of shifting a legacy bank model to a partnership banking model.
PwC brought together a number of cloud-based platforms using SaaS APIs , to create a new digital banking model made up of various Fintechs, each expert in specific areas, to reach more customers while reducing costs, such as in house IT costs. This model included Credit Kudos as the ecosystem’s credit bureau of choice – offering an alternative way to measure creditworthiness using open banking data instead of historical borrowing information. By working with Fintechs that are innovative leaders in their fields, this allows a bank to quickly meet changing customer expectations, without the need to develop this technology themselves.
For financial institutions and banks, challenger credit bureau, Credit Kudos, provides them with new decisioning models and product opportunities by allowing them to redefine their overall lending strategies and approaches. Using open banking, financial institutions have access to additional, more up-to-date information than was previously available to them through traditional credit bureaus. This includes real-time income and expenditure and also an indication of future liquidity.
Importantly, Credit Kudos delivers more precise and refined risk and affordability measurements to lenders, thereby allowing them to make faster decisions, increase acceptances and reduce defaults. In turn, people searching for credit – including the traditionally underserved – will be able to quickly and easily access new, bespoke product offers by securely sharing data from their bank account. This sharing of financial information will allow them to get a response in minutes, increase the chances of them being approved for credit when they previously may have been turned down, and could also allow them to get a better deal.
Freddy Kelly, CEO and co-founder of Credit Kudos comments: “PwC’s digital banking ecosystem is an important milestone in the banking sector as the power of open banking data gains momentum, and we’re excited to be a part of this journey. Our API provides financial institutions with valuable insights and personal data not available through traditional credit bureaus and will allow them to re-evaluate their decisions to create new customer offerings and additional revenue streams. In turn, this benefits borrowers by providing them with a quick and hassle-free way to apply for credit, getting a response in near real-time. This is the start of an important and positive change to the financial sector, showing how financial institutions can evolve quickly and effectively through partnerships.”
PwC analysis suggests technological step changes in the banking sector could bring a boost of more than £34.6bn to the UK’s economy by 2030.
Mike Kennelly, Director, Financial Services Technology Consulting from PwC comments: “The third wave of digitisation is emerging where open APIs and open platform banking are rapidly changing the shape of financial services. Legacy banks need to move towards ecosystem banking where they can leverage third parties to extend their customer reach and implement a new disruptive business model. We have shown how this can be done with relative ease by building our own digital ecosystem bank and by linking to some of the most disruptive, innovative APIs available – such as Credit Kudos. Existing financial institutions and banks need to adopt this new and different mindset – thinking of their competitors as potential collaborators in an environment where consumer multi-banking is becoming the norm.”