The banking service helping first-time borrowers discover a new world of credit

A new banking service that helps people without a credit score get a loan by making it easy for them to show lenders they are responsible with money has been created using Microsoft technology.

Direct ID Insights aims to “put everyone in control of their data” by letting them quickly and easily share personal financial information, such as bank statements, online with recognised companies who can lend them money.

The secure service, created by UK company The ID Co, shares key information in the customer’s statements – such as income and spending – with the lender in easy-to-read Power BI charts. Not only does this remove the need for people to send bank statements through the post or take them to a bank branch, but it also lets lenders see how someone handles money, even if they haven’t built up a credit score, in seconds.

“Our aim is to open up access to finance and put everyone in control of their data,” said James Varga, founder and Chief Executive of The ID Co. “When you submit a loan application, you usually have to send the lender up to six months’ worth of bank statements. They then have two questions they need to answer when considering whether to give you a loan: Are you who you say you are? Can you afford the loan?

“Consumers want to make that process as quick and easy as possible. No one wants the car loan or the mortgage, we want the car or the house, so we want to get through the loan application process as quickly as possible.

“It’s a great option for everyone, but especially for people who don’t have a credit score. For example, why do teenagers have to get a credit card and build up debt to get a credit report so they can get a loan for a car in a few years’ time? Why can’t they show lenders they are responsible with money, they have a part-time job and are going to university without going through that process? Direct ID makes that happen.”

The ID Co provides its Direct ID platform to lenders, who use it to make lending decisions. Consumers can opt out of using Direct ID, but it has proven popular with many businesses and their customers. The ID Co was formed in 2011 and now covers 32 countries, working with customers such as Clydesdale and Yorkshire Bank.

Interest in Direct ID has grown since January 2018, when Open Banking was introduced to the UK following government recommendations on changes to the financial sector. The move put customers and small businesses in charge of their own financial data, giving them the opportunity to share it securely with multiple banks and third parties via a single, digital app to find the products that are best suited for them.

The ID Co uses Microsoft’s cloud platform, Azure, to run Direct ID, Power BI to turn the financial data into simple graphs to help staff make more informed decisions, and Office for internal operations.

“Our goal is to be a global open banking provider to assist businesses in helping customers,” Varga added. “To do that we need scalability and resilience, and we get that with Azure. The credibility of Microsoft and how Azure works for enterprises really appealed to us, too. It gives us the support to keep doing what we do best without focusing on the infrastructure. We don’t own or rent any servers, everything is Azure and Office 365.”

The ID Co is launching its Power BI solution on the Microsoft Azure Marketplace, which will enable any company to use graphs to see customer data.