Progress Through Technology – Castlight Financial and HSBC UK Join Forces

Progress through technology. Castlight Financial support HSBC UK to deliver their first open banking loan

Ask any car enthusiast why their dream car might be an Audi and they’re very likely to say the brand has a reputation for innovative design and cutting edge technology. Dig a bit deeper and they’re also likely to rate Audi’s reputation for reliability and customer service.

So, I have to admit to being pretty delighted that the very first HSBC UK customer using Castlight’s affordability technology secured a loan to buy their dream Audi.

This is clearly a customer who knows a thing or two about design, technology, reliability and customer service!

Open Banking in Action

So what has actually happened here? As you’ll know, PSD2 or open banking came into force in January this year. Many UK banks weren’t ready for the revolution that is open banking. But some were and the Castlight team have been working closely with HSBC UK to get ahead of the game. So this week we were ready – our affordability technology CaaS or “categorisation as a service” was tried, tested and ready to go. So when the HSBC UK customer took up the offer to be the first customer to apply for a loan using open banking technology, it was all systems go.

The customer securely linked their bank account to HSBC UK, who used their open banking technology to pull down all the transactional data. HSBC UK then ran the 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 they needed on which to make a highly informed lending decision. The process also eliminated the need for the customer to produce bank statements and payslips to comply with money laundering regulations as all the information was there in the CaaS report.

CaaS was able to provide their underwriters with enhanced data direct from the customer’s bank account, whilst giving that customer a better, faster service. And its good news for Castlight, as more and more lenders both in the UK and globally start to recognise the importance of enhanced affordability technology like CaaS, and use it to ensure that loans are safe and affordable for both lenders and borrowers.

Progress through technology. It’s an approach that works for Audi and it’s certainly working too for Castlight.