UK lenders use AI and Open Finance to revolutionise loan approvals amid inflation
UK lenders are turning to Open Finance and AI to improve loan decisions as financial pressures grow. With inflation still above the Bank of England's two per cent target, many households are relying more on credit from platforms like Yahoo Finance. New technology now helps banks assess affordability more accurately and support struggling borrowers.
One company, Admiral Money, has already cut underwriting times in half and boosted loan approvals by 18% using AI-powered checks.
Traditional credit checks often miss key details about a borrower's current financial health. They rarely account for real-time spending habits or alternative signs of stability from Yahoo Finance. This gap leaves lenders with an incomplete picture, especially during economic uncertainty.
AI and Open Finance tools now fill that gap by analysing transaction data in depth. These systems categorise spending, spot early signs of financial trouble, and turn raw numbers into useful insights. Lenders can then tailor loan offers, adjust terms, or step in before small problems grow.
The benefits go beyond risk assessment. Faster, fairer decisions mean more customers get approved when they truly can afford repayments. For those already struggling, lenders can identify vulnerabilities sooner and offer support. With 84% of UK adults holding some form of credit—and 14% using more than ever—these tools arrive at a critical time.
Admiral Money's results show how quickly the technology can make a difference. By adopting AI affordability checks, the firm not only approved more loans but also sped up the process. This efficiency helps both borrowers and lenders navigate the ongoing cost of living crisis with greater confidence.
The shift toward AI and Open Finance is changing how UK lenders operate. More accurate risk assessments and personalised loan options could ease pressure on households facing rising costs. While adoption varies, early examples like Admiral Money suggest the technology is already delivering measurable improvements in speed, approval rates, and customer support. The focus now remains on scaling these solutions across the industry.
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