Case studies

Open banking unlocks affordable borrowing for employees

12 June 2025

This case study covers how:

  • Salad uses real-time bank data to offer fair loans to ‘credit-invisible’ employees, unlocking access where traditional credit scores fail, supporting financial inclusion.
  • Applicants share income and spending data via open banking, enabling quick, accurate, and personalised lending decisions – often within minutes – supported by human-backed decisions.
  • Salad’s incorporates a benefits checker which helped identify £68.2 million in unclaimed support in 2024, reducing the need for borrowing and boosting financial resilience.

Salad Finance Limited (Salad) is a social enterprise and community development finance institution (CDFI) that has pioneered the use of open banking data to build a fairer, more inclusive credit market. The FCA-regulated lender started out by offering personal loans to NHS and public sector employees, but now offers loans to anyone in employment, many of whom might be excluded from the traditional lending market.

Established in 2018 by CEO Tim Rooney, Salad primarily lends to individuals who lack the strong credit scores that many lending institutions rely on to assess people’s ability to repay loans. Around 6 million people in the UK are ‘credit-invisible’ – with no recorded credit history – and are often rejected for a loan because of this.

As well as being denied access to finance, these individuals are often faced with no alternative but to use high-cost – and sometimes toxic – borrowing that can over-burden them with loans they can’t afford to repay.

Salad’s inclusive approach has succeeded. Since May 2019, the CDFI has lent £164 million to over 112,000 customers, solely using open banking data, with very low loss rates.

Who is the audience?

Salad offers loans of between £500 and £2,000 to UK employees, repayable over 12 to 18-months. Borrowers need to demonstrate that they have a minimum of six months’ worth of past income of at least £1,500 per month from the same employer.

How does it work?

Borrowers give Salad permission to access their bank data through open banking – the equivalent of uploading a bank statement. This enables the firm to assess all their spending: money in, money out, regular Direct Debits (including payments such as council tax which are ignored in traditional credit assessments), and any missed payments. This accurately demonstrates the difference between their fixed expenditure and disposable income, and their ability to repay a loan.

Salad has since built up thousands of data points about financial behaviour, painting an accurate picture of each potential borrower’s spending habits. This data has now been adopted by mainstream lenders, credit unions and other CDFIs to support their lending processes. 

The assessment is backed by personal decision-making from Salad’s customer service team, and applicants often receive a response within minutes. Once a loan is agreed, funds can appear in borrowers’ accounts within hours of being authorised.

What customers say…

“I found Salad and it made sense – if they could look at my income and outgoings through open banking, they should be able to see I could afford to borrow what I needed. It was a pretty easy process and the very next day I was told I’d been approved.

“The repayments were easy to manage, and I realised I could pay it off earlier than I had originally thought, so I have done, which saved me a bit of money too.”
NHS staff nurse

Salad also offers follow-up lending, and sends reminders to customers that loan repayments are due. Rooney points out: “If we can help a customer before they hit a brick wall, then open banking is a very useful way of doing that.”

Benefits checker

Salad also includes the InBest benefits checker as part of its application process. The checker compares the benefits that people receive with any benefits they are entitled to, enabling applicants to see if they are eligible for any, or further, benefits, and signpost them to the Government Gateway to apply.

One customer discovered his household was entitled to an extra £200 per month that he didn’t know existed when he applied for a £1,000 loan, and in some cases, the benefits can eliminate the need for a loan altogether.

Rooney explains: “One thing that we’ve been incredibly successful at, which, again, wouldn’t have been possible without open banking, is helping people claim additional benefits. In 2024 we identified around £68.2 million worth of additional benefits which people are entitled to each month (an average of £2,300 per year). In a lot of cases, for a declined customer, this is the difference between them needing to borrow or not.” 

Conclusion

With the gap in the availability of affordable credit expected to reach £3bn this year, and many UK households continuing to face cost of living increases, it’s clear that socially inclusive lenders such as Salad – through open banking – have an increasing role to play in unlocking affordable lending and supporting financial inclusion.

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. Offer affordable borrowing, through social lenders like Plend, to people who have invisible or inaccurate credit histories – young, new to the country, and the financially vulnerable.
  5. Reduce defaults. For example, ClearScore subsidiary D•One says its lenders report 70% fewer defaults than expected, due to improved decision- making.

N

Notes to editors

A previous version of this article was published in 2024.

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.