Case studies

Open banking data supports debt consolidation and affordable lending

14 July 2025

This case study covers how:

  • Social lender Plend uses open banking data to assess affordability in near-real time, enabling fairer, faster loan decisions for people with thin or inaccurate credit files.
  • Customers report feeling more fairly treated, with open banking offering a transparent alternative to postcode-based or traditional credit scoring models.
  • This approach has helped customers save around £2,000 compared with traditional lending, reducing reliance on high-cost credit and supporting debt consolidation.

Cost-of-living challenges faced by many UK households have highlighted the continued need for affordable finance – particularly for individuals who may not have a strong credit history. Plend is one of the new breed of alternative lenders that use open banking transaction data in its decision-making when it assesses loan applications. This enables more people to access credit, at more competitive rates, which they may have been denied using traditional loan criteria.

The FCA-regulated lender uses open banking data to offer affordable lending to people who have invisible or inaccurate credit histories – young, new to the country, and the financially vulnerable– offering them a fair decision, affordable repayment rates, and a more compassionate way to borrow. 

CEO and co-founder James Pursaill points out that many traditional loan assessments are partly based on outdated criteria such as postcode or regional data. If applicants have a thin credit file, using this data can significantly skew the outcome of loan applications. He adds that there is no correlation between where people live and their likelihood to repay. 

According to research from PWC, up to 20 million UK adults are financially underserved due to inaccurate or incomplete credit data. Plend’s 2025 Financial Inclusion report adds to this picture, revealing that over one third (38%) of UK adults say their credit score has negatively affected their ability to access financial services. The research also suggests that 24% of people have found it harder to access loans or credit cards over the past year, while 29% of people feel locked out of the financial system altogether. 

The lender’s alternative approach to credit saves customers an average of £2,077 compared to traditional lenders, charging customers an average APR of 19.22%. And importantly, 72% of Plend’s customers may have otherwise been excluded, denied funding, or forced to rely on expensive overdrafts, credit cards – or even illegal money lending.

Plend uses payments provider GoCardless’s portal  to make repayments simple and secure. Once approved, customers are taken to a Plend-branded GoCardless portal to set up their direct bank payment.

What the customers say…

Plend asked some of its first customers about their experience of using open banking data as part of the loan assessment and what difference it made to their finances. We share their views below.

Consolidating debt

Customer 1

“I wanted to take out a loan so I could consolidate my debts into manageable monthly payments. Plend’s open banking system, compared to the credit score system, gave me a fair chance to be accepted. It made me feel more confident that I was being evaluated fairly. Being able to have that lifeline has helped a tremendous amount, allowing me some breathing space from overwhelming debts”

Assessing ability to repay

Customer 2

“Plend looks beyond that ‘one size fits all’ thinking of your credit score and your postcode. I was given a much fairer interest rate for my personal circumstances. Other lenders just look at credit scores, whereas Plend looks at your banking data too, which allows them to see your incomings and outgoings. The open banking approach definitely made me feel more confident that my application was being reviewed fairly. It only takes minutes to set up, and it’s not a long drawn-out process.

Before Plend my only options were higher interest rates, being in a vicious circle and never getting out of debt.”

Faster decisions

Customer 3

“Credit scores will always be here, but with open banking, it gives access to your recent banking data to understand exactly what you can afford to pay each month. It’s a great way to demonstrate if you can actually afford the loan. If you’re looking to consolidate debt, then it’s easy to see which amounts you’ll be able to pay off.”

“[Having to connect my bank account to Plend] didn’t make me feel nervous at all – after all, it’s my bank account and I have nothing to hide. I suppose there are always security issues but because Plend explained they were regulated by the FCA I felt it was safe.” 

Conclusion

Plend is one of several organisations to see the benefit of using open banking data in the loan approval process, helping to tackle financial exclusion and offer fairer, more socially responsible borrowing to under-served audiences.

Open banking isn’t just about expanding access to credit, it also provides a powerful tool in fortifying your financial security. Plend leverages open banking to provide our users with fraud prevention and anti-money laundering protocols. Our customer’s safety and trust are our top priorities, and with open banking, we ensure a level of protection that sets us apart.”

James Pursail, Plend CEO

Open banking and effective debt management

Open banking data can also help with the following:

  1. Flag up customers in pre-arrears, preventing them from falling behind with repayments.
  2. Enable debt charities, such as Citizens Advice, to use specialist tools to accurately assess clients’ finances, speeding up access to tailored support, and reducing admin time for advisers.
  3. Identify unusual spending patterns, such as problem gambling, and signpost users to specialist help.
  4. Social lender Salad offers loans of up to £2,000 to employees, which also checks whether employees are eligible for state benefits.
  5. Reduce defaults. For example, ClearScore subsidiary D•One says its lenders report 70% fewer defaults than expected, due to improved decision- making.

Notes to editors

A previous version of this article was published in 2023.

Open Banking Limited does not endorse any of the products or companies mentioned here.

If you would like to share your organisation’s experience of open banking, please email us at press@openbanking.org.uk. 

If you would like to talk to one of our team about how open banking could help your business, please email us at enquiries@openbanking.org.uk.