How Open Banking is transforming tenant affordability checks

We wrote about Open Banking back in 2022, when we first integrated it into our referencing platform. At the time, uptake was relatively modest - a lot of agents were interested but tenants were still nervous about the idea of sharing their bank data electronically. Three years on, the picture has changed completely.

Open Banking is now our most-requested income verification method. More tenants are comfortable with it, more agents trust it, and - critically - it's proving far more reliable than the traditional alternatives. So we thought it was worth revisiting the topic and sharing what we've learned.

What is Open Banking, briefly?

For those who aren't familiar, Open Banking is a UK-regulated framework that allows individuals to securely share their bank transaction data with authorised third parties. It's been around since 2018 and is overseen by the Financial Conduct Authority. The major UK banks are all connected, along with most building societies and digital banks.

In the context of tenant referencing, it works like this: during the application process, the tenant is prompted to connect their bank account through a secure portal. They log in to their bank (we never see their password), give consent, and within seconds we have a verified, read-only snapshot of their transactions. We can then automatically assess income, regular expenditure and overall affordability.

Why it's better than payslips and bank statements

We'll be blunt about this: paper payslips and PDF bank statements are not reliable. Over the last two years, our fraud detection system has flagged an increasing number of fabricated documents. With generative AI tools now widely available, creating a convincing fake payslip or bank statement takes minutes. We've seen cases where every detail looked perfect - correct formatting, company letterhead, plausible figures - but the income was completely fabricated.

Open Banking eliminates this problem entirely. The data comes directly from the bank. It can't be edited, fabricated, or selectively presented. If a tenant's salary lands in their account on the 25th of each month, we can see that. If they're spending £800 a month on credit card repayments, we can see that too.

For agents, this means more confidence in the affordability assessment. For landlords, it means better protection. And for honest tenants, it means a faster, smoother application process.

What we've seen in practice

Since we started tracking the data, references that use Open Banking for income verification complete on average 1.5 days faster than those relying on employer references. That makes sense - there's no waiting for an employer to respond to our email, no chasing, no missing letters. The data is just there.

We've also found that Open Banking gives us a more complete picture of a tenant's finances than a simple salary confirmation. An employer can tell us that someone earns £35,000 a year. Open Banking shows us that they also have £500 a month in credit card payments, a car loan and a gym membership they probably should have cancelled. That matters when you're assessing whether they can genuinely afford £1,200 a month in rent.

The privacy question

The most common concern tenants raise is about privacy, which is understandable. A few points that might help when explaining it to applicants:

• Vorensys is an authorised Account Information Service Provider under FCA regulation
• We use read-only access - we cannot move money or make transactions
• We only access the data needed for the affordability check
• The connection can be revoked by the tenant at any time
• We don't store raw transaction data beyond what's needed for the reference

In practice, most tenants who try it once are happy to use it again. It's quicker for them too - no scanning payslips, no downloading bank statements, no waiting for their employer to respond.

Getting started

Open Banking is available to all Vorensys customers at no additional charge. If it's not currently enabled on your account, get in touch and we'll switch it on. For new customers, it's included in all our referencing packages - just start a free trial and you'll see the option when submitting your first reference.