The news: UK specialist lender Shawbrook Bank will give a discount on loans to applicants who share their open banking data, per AltFi.
More on this: The privately held bank is partnering with the credit service ClearScore’s open banking technology to assess the creditworthiness of applicants.
Here’s how it works:
Key context: Transactional-level data is only available to franchise banks who own the customer relationship. But because one basic principle of open banking is that consumers own their personal financial data—with the right to use or share it, with requirements for data privacy, data permissions, and secure exchange—that data now becomes, effectively, another asset that consumers can trade.
In this exchange, Shawbrook gets more comprehensive and detailed information for making credit decisions and consumers receive a discount.
The big takeaway: Since everything we possess or do is digital or can be represented digitally, financial data sets also can be captured as and traded as collateral. This brings to mind the now-defunct New York-based startup Datacoup, which for a short time let individuals sell their personal data, such as social media activity and credit card transactions, to information brokers for a monthly fee. Shawbrook’s offering is less radical than that. But it’s a lot more transparent than other platforms and transactions that are continually harvesting consumers’ financial data.