From Instant to Confident Decisions: How Open Banking Is Reshaping Lending
By Bartosz Pundyk, Head of Growth at Kontomatik
Digital lending has spent the past decade pursuing one goal above all others: speed. Paper applications have given way to digital onboarding, manual underwriting has been supplemented by automation, and what once took days can now happen in minutes.
Speed, however, is no longer the industry's defining competitive advantage. Today's challenge for lenders is more complex. They must continue delivering near-instant decisions while demonstrating that those decisions are responsible, transparent and based on a comprehensive understanding of a customer's financial situation. Across Europe, this challenge is becoming even more relevant as the revised Consumer Credit Directive (CCD2) raises the bar for creditworthiness assessment and responsible lending.
The future of lending, therefore, is not about choosing between speed and responsibility. It is about achieving both through better financial data and smarter analytics.
Not only faster but also more accurate credit decisions
Traditional lending models have long relied on credit bureau information, declared income and supporting documentation. These remain valuable sources of information, but they often provide only a snapshot of a customer's financial circumstances.
Consumers' financial lives have become more dynamic. Many people combine multiple income streams, work as freelancers, or experience fluctuating earnings throughout the year. At the same time, household expenses can change rapidly, making historical credit performance only one part of the overall risk picture.
This is where Open Banking can play an increasingly important role in lending.
With explicit customer consent, lenders can access account information that provides a richer and more up-to-date understanding of financial behaviour. This can help them assess recurring income, regular financial commitments, cash flow patterns and overall account stability. But the objective is not to collect more data - it is to improve the quality and relevance of the information used to make lending decisions.
Analytics turns raw data into meaningful insights
Raw data alone does not improve lending decisions. The greatest value lies in what can be built on top of banking data. Data enrichment and analytics - such as transaction labeling or vendor recognition - can turn complex transaction histories into structured, actionable information and help financial institutions make faster and more informed decisions.
A transaction history can contain thousands of individual data points, but its real value comes from identifying the patterns within them: recurring income, regular expenses, financial commitments and changes in cash flow. When these signals are accurately identified and combined, lenders can build a more complete picture of a customer’s current financial position.
The matter of trust
Trust remains an important factor in the wider adoption of Open Banking, but consumers are becoming more familiar with digital financial services and the value they can provide. The key is transparency - customers need to know what data they are sharing, with whom, and for what purpose.
As Open Banking matures, the consumer conversation may increasingly shift from "Is it safe?" to "What value am I getting from sharing my data?". Our experience shows that when the benefits are clear, such as faster onboarding, simpler income verification or more personalised financial services, people are increasingly willing to share their data. As the markets mature, we expect this trend to continue.
CCD2 reinforces a broader industry shift
CCD2 raises the bar for responsible lending by requiring lenders to take a more thorough view of a consumer’s ability to repay. A credit score or credit bureau check alone does not provide the full picture; lenders need accurate, up-to-date and verifiable information about income, expenses and existing financial commitments.
This creates a clear role for Open Banking. With the customer’s consent, access to transaction data can provide a better picture of their financial situation, supplementing traditional credit information with insights into actual income and spending patterns. It can also help lenders verify information that might otherwise rely on documents or declarations from the customer.
For lenders, this is not simply a regulatory requirement. Better data can support more informed decisions while also making the process faster and more convenient for consumers. For Open Banking providers, CCD2 reinforces the value of what the technology can deliver: reliable financial information at the point when a lending decision needs to be made.
From creditworthiness to financial resilience
Historically, lenders primarily asked whether a customer had successfully repaid credit in the past. Increasingly, they are also asking whether that customer has the financial resilience to take on additional obligations today.
The distinction matters.
Past repayment behaviour remains an important predictor of future performance, but it does not always reflect a person's current financial reality. Real-time financial data allows lenders to complement traditional credit information with a more current picture of day-to-day financial health.
This creates opportunities for more inclusive lending, particularly for consumers with limited credit histories but stable financial behaviour. It also helps lenders manage risk more effectively by identifying emerging vulnerabilities earlier in the decision-making process.
The next competitive advantage
Speed will always matter. But in the years ahead, the institutions that stand out will be those that combine speed with trust, explainability and a deeper understanding of their customers' financial lives. Better financial data is making that possible, and, increasingly, making it essential.
The opportunity is not simply to automate more of the lending process. It is to make the process more informed at every stage: from verifying income and assessing creditworthiness to making a decision that is both timely and responsible. In that sense, the next evolution of digital lending is not just about instant decisions. It is about having greater confidence in the decisions being made.
