From reading articles written about Fronted as well as discussion some of us had on the Monzo forum about Fronted, I’m interested in how you plan to use Open Banking to build credit products and how you plan to assure that people are honest with you when supplying you with Open Banking authorisation.
One thing I liked about the sound of Fronted is that you plan to use the Open Banking api to look into borrowers financial history instead of the estate agents normal “Give us 6 months of bank statements etc…”. What I’m mainly wondering is how can you be sure that the potential borrower is not misleading you with the account they provide you? For example, person a has 3 current accounts, one that has a large overdraft which they’ve missed repayment criteria and are over the limit for multiple months in a row, one that doesn’t get used anymore but the person has a loan with the same bank where they have had the occasional late/missed payment and lastly a fairly recent account which is now their main account with their salary being paid in and bills out etc with no arrears.
What’s to stop that borrower only supplying you with that last bank account and pretending the others don’t exist? Do you plan to carry out credit checks alongside the Open Banking requirements? If so what does the Open Banking offer you that the CRA’s don’t?
I understand that a limitation of Open Banking means that you can’t see all accounts somebody holds so how is that issue overcome?
Sorry, I know it’s a longwinded question but a similar topic came up on Monzo the other day about how Open Banking can’t replace CRA’s, so wondered roughly how you were handling it?
Here’s some links on previous articles and discussions