Mar 29, 2021: Open Banking Commercial Credit w/ Kabbage

Written by Dragos Cocosila

We have a lot to share this week as part of our passion to continue providing you with industry-leading information on the global Open Banking segment. This update will have the weekly additions to the Open Banking Tracker (Banks, APIs, TPPs, etc.), a look at how Open Banking is changing the way that SMEs get access to credit.

SMELending

Our Current Coverage

  • • We track 2,785 banks providing Open Banking services! (+3 from last week)

  • • 1,020 APIs currently tracked on our platform!

  • • 404 TPPs in the ecosystem!

  • • 86 Global markets covered!

  • • 35+ Open Banking API Aggregators! (with more coming very soon...)

  • • PSD2 API & PSD2 Open Banking coverage!

  • • Track over 60+ data points for all Open Banking projects!

And we are growing on a continuous basis... 🚀🚀🚀

Developments (Mar 23rd to Mar 29th):

We initiated coverage and provided Open Banking API information for:

  • • The Kabbage Platform is a fully automated, online lending platform that supports continuous customer data monitoring.

  • RAKBANK is the trading name of the National Bank of Ras Al-Khaimah PJSC, a public joint stock company headquartered in the Emirate of Ras Al Khaimah, in the United Arab Emirates.

  • Sable is a digital banking platform and the only full-suite banking solution for internationals in the U.S., providing U.S. bank accounts, debit, and credit cards.

  • • Biggest Publicly Available TPP Registry in the Industry! 🚀🚀🚀

  • • And many more!

We continue to cover over 35 aggregators!


Open Banking Use Case Spotlight: Commercial Credit w/ Kabbage

One of the most consistent worries for a SME is their cash position and enough funds to meet short-term commitments while collecting the money owed to them. In many cases, small businesses have to draw on revolving credit facilities set up with their banks, but like most bank products, these too are ripe for disruption. Open Banking liberates account data, giving ownership over it to the account owner, and paves the way for an overhaul in how SMEs apply for and access new credit to grow their business.

Companies like Kabbage are at the forefront of this change by introducing a fully automated credit application process which qualifies a business based on various criterion outside of the traditional credit score. Richard Prior, Kabbage’s Director of International Policy, explains that:

"The ability on the part of SMEs to give that permissioned access empowers the consumer to better manage finances and shape financial health. Given that the FICO score is a lagging indicator Kabbage uses numerous alternative data sources (including transactional data, shipping data, e-commerce and social media) to gain a holistic and live view of the business’ financial health."

The Key Takeaway…

While the risk considerations in lending to SMEs have not changed, and lenders still set their policies on lending terms and who gets approved, the amount of data points available to the lender to make these decisions has drastically increased because of Open Banking. Now instead of relying on a third-party report like a FICO score, which may at the very least be out of date at the time of the application, a lender can get a real-time view of an applicant’s financial health before making the lending decision. Not only does this granularity imply that a lender can better understand the risk they are assuming, but it also opens the door for more inclusive lending practices by considering data points that traditional lenders can miss.


Feedback

Please feel free to email us back with any coverage or data requests to implement or improve our current data set! We are a customer centric provider and want to make sure our users are as satisfied as can be!

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Have a great week and stay safe!

The Banq team

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