From Static Credit Checks to Real-Time Risk Intelligence: The Future of Lending

Open Banking has changed the rules. By allowing consumers to securely share real-time bank transaction data with lenders, it is now possible to build a far more accurate and fair picture of a borrower’s financial position. The implications are profound: better lending decisions, lower default rates, and greater financial inclusion.  

Why more data means better decisions 

With richer, more up-to-date insights into income, expenses, and spending patterns, lenders can assess repayment ability with far greater precision. This is not about giving less credit, it is about giving the right credit to the right people. 

A consumer who has been refused a loan based on outdated credit bureau data might actually be perfectly able to repay, if their current financial reality was visible. Conversely, someone showing signs of over-indebtedness or risky gambling patterns should be identified before further credit is extended. 

This shift benefits everyone: 

• Lenders can extend more loans without raising their overall risk exposure. 

• Borrowers receive fairer, more personalized decisions. 

• Society sees less over-indebtedness and fewer harmful lending outcomes. 

The PSD2 advantage 

The EU’s PSD2 directive, the foundation of Open Banking, was the game changer. For the first time, consumers were given the legal right to share their live bank data with lenders of their choice. This broke the monopoly of traditional credit reference agencies and made credit decisions more democratic and more transparent. 

The next step, PSD3, promises even broader data availability and richer insights for risk assessment. 

Turning raw data into real intelligence 

Raw bank transaction data is messy. It contains valuable insights, but without the right interpretation it’s just noise. Many lenders lack the in-house capability to categorize and make sense of it. That is where advanced interpretation tools like Kreditz ACE come in- transforming unstructured transaction streams into actionable insights for: 

• Real-time credit scoring 

• Policy rule enforcement 

• Disposable income (KALP) calculations based on actual expenses, not assumptions 

• Income verification 

• Fraud and risk flagging 

This means a loan application can be assessed in seconds, using the freshest possible data, with a clear and auditable decision trail.  

Real-time credit decisions in practice 

Consider the difference: 

• Traditional credit check: 18-month-old income data, limited expense insight, and no real-time fraud markers. 

• Open Banking credit check: Up-to-the-minute income flows, complete expense breakdown, and instant alerts if the applicant took out another loan just last week. 

For lenders, the result is higher accuracy, faster decisions, and the ability to maintain compliance with tightening affordability and creditworthiness rules, without slowing down the customer experience.  

Empowering Financial Decisions

The vision behind this approach is global. If the same financial behaviors can be measured consistently across markets, credit decisions become borderless. A consumer with a strong repayment history in Stockholm should be able to access fair credit in Madrid or Berlin without starting from scratch. 

Kreditz is already live in 12 major markets including the Nordics, the UK, Germany, the Netherlands, and Belgium with expansion underway across Southern Europe. 

The future of credit is real-time, data-rich, and fair 

As regulation and technology converge, the winners will be those who can harness real-time financial data to make instant, accurate, and compliant credit decisions. Open Banking is not just a compliance tool, it is the foundation of a more inclusive, less risky credit market. 

Further reading: This article draws on insights from Swedish fintech publication Kreditnytt. The original Swedish article, “Kreditz tar kreditprövning in i framtiden”, features an in-depth interview with Kreditz co-founder and Head of Advisory Services Magnus Källhager on the future of credit scoring and the impact of Open Banking.