Open banking makes homeownership more accessible
Open banking enables people and businesses to safely share their data. This empowers them to choose from financial services and access innovative experiences – and it can also help close the homeownership gap. Complementing lending decisions with data, such as successful rent payments, can be a good indication of a borrower’s ability to afford a mortgage.
The use of consumer-permissioned data enabled by open banking holds promise for extending credit beyond mortgages as well, whether in the form of auto or small business loans, credit cards, or installment payments.
“This complements the current ratings system and improves underwriting models in ways that make borrowing more inclusive while minimizing risk for lenders,” says Jess Turner, Mastercard’s executive vice president for global open banking and API.