Castlight Financial, the Glasgow-based financial capability company, has partnered with HSBC UK in the delivery of the bank’s first open banking loan.

Following a test, and pilot programme, HSBC UK used Castlight’s categorisation tool, CaaS (Catgorisation as a Service), to process a loan for a customer in real-time. After the customer had securely linked their bank account to HSBC UK, the bank used its open banking technology to pull down all the transactional data.

It then ran the customer’s transactional data through the CaaS engine, which categorised income and expenditure into 155 categories, summarising income streams, credit commitments, essential costs and discretionary spending to reveal a monthly disposable income.

The information was then merged with credit performance data and in under 10 minutes HSBC UK had all the information it needed on which to make an 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 their  customer a better, faster service.

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

“We are 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.

“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 its also good news for the wider lending industry as CaaS, at its 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.”

Open Banking was launched by the Competition and Markets Authority to break the hold of large banks on personal banking services. It compels the nine largest to put customers’ data in a standardised and securely accessible form so that consumers can, for example, see all of their accounts in one place and easily switch providers.