EXCLUSIVE: “Leaning Into Home Lending” – Delphine Emenyonu, TSB in ‘The Fintech Magazine’

Open banking and AI have contributed to a turnaround in UK bank TSB’s lending procedures. It empowers customers with detailed information about their financial circumstances and provides the bank with more accurate risk ratings

“Data, data, data” – that’s the mantra of Delphine Emenyonu, who heads up Unsecured Lending and Open Banking at UK retail bank TSB. And its use at an increasingly granular level is at the very heart of the bank’s drive to better serve and grow its more than five-million-strong customer base, particularly when it comes to fair and affordable lending decisions.

That has meant leveraging open banking and AI together – a powerful combination that has not only resulted in creating safer, more personalised borrowing for its customers but also substantially reduced the number of missed payments they make. Through real-time analysis, Open Banking enables much more precise income and expenditure assessments.

Emenyonu says: “With a click of a button, we give customers clear visibility of their expenditures, so they can really understand what they can afford. With all that data, we can then guide our customers – maybe in how they can potentially reduce expenditure to enable them to pay for what they need. That’s the first element.

“The second is income verification. Gone are the days when you had a job for life. Customers move jobs all the time now, and, in the gig economy, people’s incomes change, month to month. While the average consumer might not understand how much they really earn, by leveraging open banking, we’re now able to categorise all that income information and give it back to them, to help them make more informed decisions.”

Keeping the customer in the loop and ensuring they are provided with easy-to-understand personal financial information is not only important at a societal level (up to seven million people in the UK are deemed to be at risk of financial exclusion due to limitations in the information used by providers that make key decisions that shape their lives), but it can also help banks stay within the UK’s Consumer Duty law and not fall foul of irresponsible lending regulations.

Now, more than two years into a tech-enabled project to bring Open Banking, personalisation and data-driven financial marketing to life – with a mission to create money confidence for its customers – the bank’s digital strategic reset is starting to bear fruit.

Open and insightful

By 2024, it had the data to be able to reach out to more than 120,000 customers who were at heightened risk of falling into financial difficulty, to offer extra support and help them to avoid personal financial harm.

Its own probe into overdrafts identified a set of customers who did not have direct debits set up, affecting their credit score when they failed to pay on time. It resulted in a significant uplift in payments in the first week after the bank sent personalised messages to those affected.

Things are undoubtedly tough for many consumers. Millions continue to experience their own cost of living crisis, which was starkly highlighted in a 2024 survey by the Civil Justice Council that found about 28 per cent of adults were not coping financially. It’s an area where Emenyonu passionately believes TSB can help its customers through the use of open banking and AI.

“By leveraging open banking we’re now able to categorise all that income information and give it back to customers, so they can make more informed decisions”

“The current lending stack is very much based on bureau data,” says Emenyonu. “But the reality here is that there is a lag within that data. If you, for example, change your job in February, then you apply for a lending product in March, the information that the bureaus have is based on the information they had as of January.

“The beauty of Open Banking is that if you apply for a loan and say ‘my new salary is £50,000’, we can see that has come into your bank account to support with a lending decision. So I do think that open finance is going to play a great role in terms of improving financial inclusion as well.”

When it comes to repaying loans, specifically business loans for those who took advantage of the 2020 Bounce Back Loan (BBL) scheme, TSB has an ongoing relationship with Flexys, which provides collection management technology, based on real-time insights provided by open banking. TSB is using it to help customers manage their BBL repayments and Pay As You Grow options.

And, as financial literacy has a direct impact on how well customers handle their money, TSB also runs a schools education programme for pupils aged from 13 to 18. The programme encourages students to complete short learning modules to boost money confidence.

“It’s focussed on supporting them in reducing financial anxiety, but also really improving the understanding of finance,” says Emenyonu.

TSB is working hard to help its older customers overcome the barriers they face in an ever-changing digital world, too.

“I see TSB as a digital bank with a human touch,” says Emenyonu. “We are very fortunate in that our brilliant team of Money Confidence Experts is available in our branch network, as well as on the phone, on video call and online – meaning all our customers, including older customers, can access the support they need from a person. Having that human interaction does make a difference.”

The continuing development and increasing use of digital wallets – UK consumers are now the third heaviest users in Europe behind Denmark and Norway – is a key part of TSB’s tech drive.

“From an industry perspective, I think the UK is moving towards what I consider to be a smart-wallet-first society where payment is instant, intelligent and identity-based,” Emenyonu says. “Our role is to enable that ecosystem safely for customers who wish to use it, but at the same time, anchor it to ensure money flows securely and inclusively. It’s not just about payments, but also working with customers in terms of identifying the value that wallets have.”

This article was published in The Fintech Magazine Issue #36, Page 18-19