Mortgage Lending Open Banking — Nordigen

How mortgage lending uses open banking

| Article by: Laura AasheimProfile Image Laura Aasheim 5 min

Digitisation of the mortgage sector has been slower than for other financial sectors. However, the 2020 lockdowns forced the mortgage industry to integrate more technology into their businesses (Saines, 2020). The way customers used financial institutions changed profoundly, with the pandemic significantly increasing online penetration (Meneses et al., 2020). 

The rise of fintechs has also caused a shift in the mortgage lending market, as traditional banks are no longer the only mortgage lenders. Due to advances in AI, machine learning and robotic process automation, both new and traditional lenders have been able to configure technology to meet the changing needs of the market (Camerieri, 2020).

Mortgage lending is changing

A survey by ICE Mortgage Technology found that the pandemic has permanently changed how those looking to buy or refinance a home are seeking lenders. Borrowers now seek lenders that offer online tools to complete their mortgage loans from home (Richardson, 2021). 58% of borrows said the availability of an online application would affect their lending decision (Richardson, 2021).

By making it easier, faster and more transparent, the advances in digital technology have resulted in significant improvements in the mortgage application process (Richardson, 2021). The adoption of open banking helps to verify income, speed up identity confirmation and customer onboarding, and even helps with credit decisions (Smith, 2021). Lenders can make faster decisions, while also ensuring the security of customer data.

Mortgage lending fintechs are removing third-party verification by starting to utilise blockchain technology and smart contracts, while at the same time offering transparency and trust (Langford, 2017). The new technology means the transaction can be followed and verified by all parties involved through a secure network (Langford, 2017). 

What is open banking?

Open banking is a banking practice that securely shares financial information, such as consumer banking transactions and other financial data, to third-party financial service providers (Estevez, 2020). Sharing data is done through the use of application programming interfaces (APIs) and only with the consent of customers (The Balance, 2020). Open banking is the driver behind both innovation and competition in the financial industry (Cahill, n.d.).

Why does mortgage lending use open banking?

In the mortgage lending industry it is important to understand customer needs, offer appropriate loans, as well as make the loan process as seamless as possible.

Open banking allows mortgage lenders to reduce the number of steps required to apply for a mortgage. Furthermore, open banking reduces admin costs for each individual loan application by reducing the number of data points needed to be manually evaluated and allowing the inclusion of population risk-critical information from loan applicant bank accounts. Finally, for loan brokers open banking automates matches between lenders and loan applicants by enabling access to more information to make better lending decisions.

Some mortgage lending companies you should know about

HSBC is a British multinational investment bank and financial services holding company. These financial services include sharing self-employed mortgage borrowers’ financial details through open banking (Adams, 2021).

Trussle is a London based free mortgage broker that has revolutionised the mortgage process for consumers by using open banking (Finextra, 2019). Trussle provides live data on the best mortgages for their users based on data gathered using open banking (Barber & Scanlon, 2019).

Lendlord is a free online platform for landlords that helps them manage, track and optimise their portfolio performance. Open banking allows landlords to fully automate their cash flow, rent collection, review expenses and more (The Paypers, 2021).

What’s to come?

Mortgage lending will become increasingly digitalised. Richard Hayes, CEO of Mojo Mortgages, predicts that by 2022 over 90% of mortgage applications will make use of open banking (Mortgage Finance Gazette, 2020). To get there, the main focus will need to remain on customer experience and matching them with the best possible loans.

Fintechs must be ready to adapt - not just to a changing market, but also to changing legal requirements. The European Banking Authority (EBA) Guidelines on Loan Origination and Monitoring has resulted in the requirement for financial institutions to develop and implement standards for sound credit risk assessment, while also maintaining protections regarding customer data (Fintech Futures, 2021). The goal of the regulations is to reduce the number of risky loans. 


Adams, G. (2021, March 8). HSBC offers open banking to the self-employed. Mortgage Strategy.

The Balance. (2020, October 11). What Open Banking Is and How It Will Affect You.

Barber, A., & Scanlon, L. (2019, December 17). Open banking will facilitate home loan switching. Pinset Masons.

Cahill, H. (n.d.). InvoiceFair. The Evolution of Open Banking: Connectivity breeds digital competition.

Camerieri, J. (2020, October 6). The surprising future of mortgage technology. Housing Wire.

Estevez, E. (2020, August 27). Open Banking. Investopedia.

Finextra. (2019, November 27). Online mortgage broker Trussle hires Todd Zino as chief technical officer. Finextra.

Fintech Futures. (2021, April 26). Implementation of regulatory changes in lending. Fintech Futures.

Langford, S. (2017, November 30). Mortgage lending: Pros and cons of fintech. Wolters Kluwer.

Meneses, N., Neves, R., Niza, G., Quinn, T., & Zonno, Y. (2020, August 5). How European banks can digitize the mortgage experience to help customers during and beyond COVID-19. McKinsey & Company.

Mortgage Finance Gazette. (2020, March 6). Are we on the cusp of an open banking and mortgages revolution? Mortgage Finance Gazette.

The Paypers. (2021, February 2). Lendlord, Plaid to launch Open Banking integration for landlords. The Paypers.

Richardson, B. (2021, May 13). Forbes. How Digital Technology Changed The Face Of The Mortgage Industry.

Saines, K. (2020, November 10). From evolution to revolution: How tech can help the mortgage industry thrive post-pandemic. Mortgage Finance Gazette.

Smith, O. (2021, February 5). Yolt Technology Services to help mortgage lenders tap intoopen banking data. AltFi.

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