Frequently Asked Questions

Open Banking lets people share verified evidence of payments that traditional credit files often miss, such as rent. With the customer’s consent, providers like Loqbox use Open Banking to track on-time rent payments and report them to credit reference agencies such as Experian. This helps people with thin credit files build a stronger credit history, which can improve access to fairer rates on mortgages and other lending.

Common examples of Open Banking include automated savings through variable recurring payments (VRPs), credit scores boosted by verified rental payment history, Making Tax Digital returns built from categorised bank data and faster loan affordability checks using verified transactions. Pension providers are also exploring Open Banking data to spot when a member might be at risk of transferring out, so they can offer timely support.

A variable recurring payment (VRP) is an Open Banking payment method that lets a customer authorise payments within rules they set, such as a maximum amount, a frequency or a minimum balance threshold. Unlike standing orders or Direct Debits, VRPs can flex around the customer’s circumstances, making them well suited to automated savings, loan repayments and moving money between a customer’s own accounts. At Moneyhub, VRPs are also known as Smart Payments.

The most suitable vulnerable customer strategy will vary from organisation to organisation, but relying on experts in the sector is a good place to start. Remember that vulnerability may change over time, so you should find a way to continually monitor the individuals and cohorts moving from and to vulnerable states, across a range of health-related, resilience, life event and capability risks.

Under Consumer Duty there are four main risk areas that could signal a customer is in a vulnerable state. These are 

• health: disability, mental health conditions or worsening physical conditions
• life events: such as divorce, bereavement or job loss
• resilience: inadequate savings or heavy debt, or inability to withstand financial shocks
• capability: poor numeracy, literacy or lack of English understanding

Conversion rates often drop when the offer is too broad, badly timed or delivered through the wrong channel. In banking, this usually means the customer doesn't recognise the offer as relevant to their financial life, even if the product suits someone else.

The main challenges are trust, timing and relevance. A customer may ignore an offer if it arrives too early, too late or through a channel they rarely use. Conversion also suffers when customer segmentation relies on demographics rather than actual financial behaviour.

Transaction data helps banks understand what customers are doing with their money now. That makes it easier to spot product needs, time offers around real events and choose a more suitable channel. The result is a more relevant offer and a better chance of conversion.

Open Banking typically covers payment account data, such as balances, transactions and payment initiation. Open Finance can include a broader range of account connections, including savings, pensions, investments, credit, mortgages and insurance. The right choice for you will depend on the exact customer journey that you want to build, and most institutions use both.

Open Banking can be limited by account scope and data coverage. For financial institutions that need a broader view of a customers’ finances, or want to build products that integrate with more than just current accounts, Open Finance might be required.

The UK Open Finance strategy focuses on extending secure, consent-based data sharing beyond bank accounts to a wider range of financial products and services. The FCA’s Open Finance roadmap sets out a path towards delivery by 2030, alongside the wider Smart Data agenda.

Transaction enrichment reduces avoidable disputes by giving customers clearer details at the point of doubt, including the merchant name, logo, category, payment status and location where available.