Credit card startup Yonder is teaming up with open banking platform Yapily to provide consumers access to credit without needing a U.K. credit score.
Working together, the companies are striving to level the playing field when it comes to access to credit by accessing a consumer’s financial footprint with open banking, according to a Wednesday (April 20) press release.
“Unfair credit scoring methods, legacy app experiences, and vague pricing techniques are a thing of the past,” Yonder CEO and co-founder Tim Chong said in the release. “With open banking, we’re bringing back fairness and equality to the credit industry. Yapily’s technology and open banking expertise are helping to make that vision a reality.”
With the customer’s consent, Yapily Data enables Yonder to analyze a person’s bank account information for details like income and expenses. The analysis of bank transaction patterns provides a more holistic credit profile.
The companies feel that this type of credit profile has the potential to transform access to finance for millions considered “credit invisibles” — expats, immigrants, young people and others with little or no established credit history.
Younger customers will see higher approval rates and will also get the additional perks of fee-free currency exchanges when shopping abroad and lifestyle rewards. By making monthly payments on time, customers will also build their credit score.
“This is yet another excellent example of how open banking is helping to serve the underbanked population, providing access to financial products to those who may not have been able to before,” said Stefano Vaccino, founder and CEO at Yapily. “It’s great to see how innovative companies like Yonder are challenging traditional credit systems and joining us on our mission to create better and fairer financial services for everyone.”