Open Banking to Open Finance: What Lenders Need to Build Now

• Open finance extends open banking to cover bookkeeping (for SMEs), mortgages, savings, investments, pensions, and insurance. Lenders get a complete financial picture — not just a snapshot of cash flow. 

• EU FiDA and the UK Smart Data Act are setting the rules. Lenders that build now will have a 24-to-36-month head start on those that wait. 

• The data improvement is asymmetric. The lift is greatest for thin-file and sub-prime borrowers — exactly where bureau data is least reliable and where better decisions matter most. 

The rules for open finance are largely written. The technology exists. What remains is a simple choice: build or watch competitors do it first. 

In 2018, PSD2 forced European banks to share current account data with authorised third parties. In the UK, the CMA applied the same logic to the nine largest current account providers. Six years on, open banking is well-established. Fifteen million people in the UK have used it, but the market has moved on. The next step is open finance — where data sharing extends beyond current accounts to mortgages, savings, pensions, investments, and insurance and for SMEs online accounting data. For lenders, this is not a minor update. It changes what you can know about a borrower, and when you can know it. 

For a plain-English definition, see our Open Banking Glossary Entry.  

Open Banking vs Open Finance: What's the Actual Difference? 

The two terms get used interchangeably but they mean different things — and the difference matters when you are planning your data strategy. 

Open Banking gives explicitly-authorised third parties read-only access to current account data. That means transaction history, balances, and — in some limited cases — the ability to initiate payments. It is useful. But it is a narrow window.  

Open Finance applies the same principle to a borrower's full financial life. Mortgages, savings, investments, pensions, insurance and tax payments all hold data relevant to creditworthiness and affordability. Until recently, that data sat in separate silos with no way to connect it; for businesses, this can include their accounting records too.  

The shift from open banking to open finance is not just a regulatory upgrade. It changes what lenders can see, at what point in the customer journey, and how accurately they can assess risk. 

Why Open Banking Alone Is No Longer Enough for Lenders 

Open banking was a genuine step forward. Real-time transaction feeds replaced income declarations. Expenditure data gave lenders a clearer view of what borrowers spent. For people with thin credit files, transaction behaviour became a useful alternative to bureau data. 

Open banking only looks inside current accounts. It misses the investment portfolio that shows financial resilience and ignores pension liabilities that may constrain affordability. 

Around 5.8 million adults in the UK lack enough credit history to generate a bureau score (source: Experian) and open banking has helped this group, but it still cannot account for savings held elsewhere, insurance coverage, or investment income paid to a separate account. 

Open finance fills those gaps. It gives lenders a complete financial picture — not just cash flow. And for lenders working under Consumer Duty, where genuine affordability assessment is a regulatory requirement, that matters more than ever. 

What Open Finance Solutions Unlock for Credit Assessment 

Open finance data is clearly richer than open banking data alone. The real question is: does that richness translate into better credit decisions? The evidence says yes — and the improvement is largest where it matters most. 

Better Affordability Assessment 

Open finance lets lenders verify the full picture of a borrower's financial commitments. Not just income and spending — but mortgage obligations, pension contributions, investment outgoings, and insurance premiums. Affordability moves from a figure the borrower declares to one you can verify from consented data across multiple accounts and importantly that meets the requirements of regulation. 

Credit Access for Thin-File Borrowers 

Borrowers with limited credit history gain the most from open finance data. Transaction-based signals — income patterns, payroll regularity, spending by merchant type — add real predictive power to credit models where bureau data runs out. My own research found these variables delivered the biggest performance lift at exactly the segments where traditional data is weakest. 

Real-Time Portfolio Monitoring 

With ongoing consent, lenders can track portfolio health as it changes. Income disruption, rising credit utilisation, missed insurance premiums — these signals can appear weeks before a default shows up on a credit file. Earlier detection means better decisions on collections, forbearance, and IFRS 9 staging. 

"Open Banking and Open Finance do to credit risk assessment what GPS did to navigation. Maps still exist, and, with a compass, you can navigate by them, but they’re no longer the benchmark for accuracy that they once were." 

— John Christiansen, CRO, ezbob Ltd 

The Role of Open Finance APIs in a Modern Lending Stack 

An open finance API is how lenders access the data and manage the consent journey – as with all elements of the open banking or open finance journey, without explicit consent, no data is available. Without a reliable, standardised API layer, open finance stays theoretical. With one, it becomes part of your lending workflow. 

EU FiDA sets API performance standards, data quality rules, and consumer control requirements. It extends the open banking framework to the full product range — mortgages, savings, insurance, and more.  

PSD3, adopted in 2024, strengthens the payment account data layer underneath. Together, open finance API connectivity shifts from a nice-to-have to a compliance requirement in EU lending markets. 

In the UK, the JROC roadmap and the Smart Data Act point in the same direction: variable recurring payments (VRP), expanded data access across savings and pensions, and interoperability standards across the ecosystem. 

For lenders building now, the practical steps in moving from open banking to open finance come down to four things: 

• Connectivity Breadth. Use multiple API aggregators — e.g., Plaid, Equifax, TrueLayer, SaltEdge, Codat, Validis — not just one. Single-provider dependency is a concentration risk in a fast-moving market. 

• Data Normalisation. Different providers return data in different formats. You must have a normalisation layer that produces consistent, model-ready features regardless of source. 

• Consent Management. Ongoing monitoring requires consent refresh. GDPR-compliant consent infrastructure — with clear audit trails — is both a legal requirement and a trust signal to customers. 

• Resilience. Open finance API calls sit in critical decisioning paths. Build failover logic so a provider outage degrades gracefully to bureau-only rather than stopping applications entirely. 

What Lenders Need to Build (or Connect) Right Now 

There is a straightforward case for moving now rather than waiting. Lenders that build open finance infrastructure today will have a 24-to-36-month head start on those that defer. The regulatory timelines are fixed. Adoption is accelerating. The first-mover window is real — but it will not stay open indefinitely. 

Here is what the capability stack looks like across four areas: 

Connectivity Layer 

• Multi-provider open finance API aggregation with failover 

• Consent management and token refresh infrastructure 

• Real-time data normalisation across provider formats 

Analytics Engine 

• Transaction categorisation at >95%+ accuracy across categories  

• Income verification and regularisation detection across multiple income streams 

• Affordability creditworthiness assessment aligned to FCA and ECB / EBA guidance 

• Behavioural feature extraction for credit scoring and early warning models 

Compliance Framework 

• GDPR/UK GDPR consent architecture with purpose limitation controls 

• Audit trails for FCA Consumer Duty obligations 

• EU AI Act documentation for AI-driven features in lending decisions 

• EU FiDA readiness assessment and implementation planning 

Monitoring Infrastructure 

• Ongoing portfolio monitoring with consent refresh workflows 

• Early warning signal generation and collections trigger integration 

• IFRS 9 staging decision support using real-time financial data 

• Regulatory reporting pipelines for supervisory data submissions 

ezbob pre-built open finance integration layer 

ezbob's Easylink technology, built into the platform, gives lenders pre-built integrations with open banking and open finance aggregators. It includes a configurable transaction analytics layer for credit risk, and a consent management architecture built for GDPR compliance and ongoing portfolio monitoring. Available via SaaS to banks and non-bank lenders across Europe. 

Contact us at ezbob.com/contact to discuss your open finance roadmap.

Frequently Asked Questions 

1. What is the difference between open banking and open finance?

Open banking covers payment and current account data. Authorised third parties can access transaction history and balances, subject to explicit consumer consent. Open finance goes further. It applies the same principle to mortgages, savings, investments, pensions, insurance, taxation (some tax authorities allow for this, e.g., HMRC in the UK), and bookkeeping / accounting data. For lenders, open banking shows daily cash flow. Open finance shows the full financial picture — assets, liabilities, and income across every product a customer holds. 

2. How do open finance APIs benefit lenders?

Open finance APIs give lenders access to consented financial data that goes far beyond a credit bureau file. You can see verified income, committed spending, and multi-product financial positions in real time — at the point of application. That reduces reliance on self-declared data, narrows affordability uncertainty, and improves pricing accuracy. The benefit is greatest for thin-file and non-standard borrowers, where bureau data runs out fastest. 

3. Is open finance regulated?

Yes. In the EU, the Financial Data Access (FiDA) Regulation — expected in force by 2025–2026 — sets the legal framework for sharing financial data beyond payment accounts. In the UK, the Smart Data Act and the JROC roadmap provide the legislative foundation. All data sharing is underpinned by GDPR and UK GDPR consent requirements. The FCA and national regulators are responsible for enforcement. 

4. What data sources does open finance include beyond bank accounts?

Under EU FiDA and emerging UK rules, open finance is expected to cover savings accounts, mortgages and other loans, investment portfolios, pension schemes, and insurance products. With customer consent, a lender can access a borrower's complete financial position — not just their current account. That includes committed mortgage payments, pension contributions, and investment income that might not appear in everyday transactions. 

5. How can lenders start transitioning from open banking to open finance?

Start by strengthening what you already have. Make sure your open banking API aggregation is multi-provider and resilient, your transaction categorisation is accurate, and your consent management meets GDPR requirements. From that base, you can extend connectivity to new data types as FiDA and Smart Data standards are published. Partnering with a platform that has pre-built integrations — like ezbob's Connected Risk Intelligence — cuts the time from planning to production significantly.