Open Banking hits 15 million users, but vulnerability needs a broader lens

Open banking has reached 15 million users in the UK, now covering nearly one in three adults, with adoption continuing to grow alongside developments like Variable Recurring Payments and the Data Use and Access Bill.

But when you look at how this plays out day to day, something important is missing. More data doesn’t automatically lead to better decisions. Transactional insight shows what’s happening in an account. It doesn’t explain what’s changing in a customer’s life.

You can see the problem here. A customer can still appear stable at first glance, even as their financial position is starting to tighten. Income might be under pressure. Costs may have shifted. Credit use could be increasing elsewhere.

But none of that is immediately visible in transactional data alone.

What this means for you: Open banking improves visibility into income and spending But transactional data on its own doesn’t explain changes in financial circumstances Early signs of vulnerability often sit outside bank data, especially around income, household changes, and credit behaviour That means risk can build while accounts still appear stable Firms combining open banking with external indicators are identifying pressure earlier and acting sooner Our data complements transactional data by adding real-time vulnerability signals, helping you prioritise the right customers at the right time

Why transactional data alone can miss early vulnerability

Spending patterns can remain stable until deterioration is already underway.

Customers prioritise maintaining their credit position. Contractual repayments are kept up to date, while pressure is absorbed elsewhere. Discretionary spend is reduced first. Short-term gaps are managed quietly, often through credit activity that sits outside the primary account view.

From a portfolio perspective, performance holds. Accounts remain current. Risk indicators show little movement.

That stability can be misleading.

Where transactional data lacks context

Transactional data reflects activity within an account. It does not capture the underlying changes driving financial pressure.

Key changes often sit outside that view:

• Income instability: Reduced hours, variable earnings, or delayed payments may not immediately show in account inflows
• Household changes: Separation, new dependents, or shifts in shared costs can alter affordability before spending adjusts
• Essential borrowing behaviour: Use of short-term or high-cost credit for core expenses often happens outside the observed account environment

 

These changes can develop without any immediate signal in transactional data.

Why this leads to delayed visibility

This creates a timing issue. Financial resilience can weaken while account behaviour still appears stable. By the time pressure shows through missed payments or clear changes in spending, the situation has already progressed.

At that point:

• Intervention happens later
• Support options are more limited
• Outcomes are harder to influence

 

The underlying reality

Vulnerability does not begin when it becomes visible in transactional data. It develops earlier, through changes in income, cost, and behaviour that sit beyond that view.

For organisations focused on earlier intervention, transactional insight on its own is not enough.

↪Further reading: Beyond the credit file: detect vulnerability before it becomes harm

The early signals open banking doesn’t always capture

The first signs tend to appear in how customers adapt. Income becomes less predictable. Credit use changes in purpose. Household dynamics change. None of these show immediately in transactional data, but they alter financial resilience straight away.

Here are some examples:

• Income becomes less reliable
  Hours fluctuate, contracts change, or earnings arrive less consistently

• Credit is redirected towards essentials
  Borrowing supports utilities, rent, and day-to-day living rather than discretionary spend

• Household structures change
  Separation, new dependents, or changes in shared costs alter affordability overnight

• Credit demand fragments
  Multiple short-term applications appear within a compressed timeframe to manage liquidity

 

A reduction in income alongside essential borrowing points to immediate pressure. Add repeated applications, and the position becomes harder to sustain, even where repayments are still being maintained.

You can see the difference in the data here. Transactional data reflects outcomes. These signals point to the conditions creating them. Across high-cost credit application data and self-declared financial information, these patterns appear well before any visible change in account performance.

That’s why accounts can continue to perform while financial resilience is already weakening. By the time this shows through missed payments or sustained changes in spend, the underlying position has already moved on.

Did you know? 66% of people are relying on high-cost credit for essentials. Learn more in our research report: The Cost of Fragility: What New Data Reveals About UK Consumers

What this means for risk detection

Detection improves when these signals are brought together and assessed in combination, rather than viewed through a single data source. And once you do that, the point at which pressure becomes visible moves earlier (along with the options available to respond).

What a more complete view of vulnerability looks like

Organisations that are moving earlier on vulnerability tend to do one thing differently. They layer their data.

Instead of relying on a single lens, they bring together multiple views of the customer:

• Transactional insight from open banking
• External behavioural data that shows how credit use is changing
• Life event indicators that reflect changes in circumstance
• Employment and income signals that show stability over time

This builds a fuller picture. One that reflects both financial activity and what’s happening around it.

You can start to see how this fits together. Transactional data shows what a customer is doing. Layered data begins to explain what’s driving it.

It also brings firms closer to regulatory expectations.

Consumer Duty places weight on identifying and addressing harm early. That depends on understanding how a customer’s situation is changing, not just how their account is performing.

That leads to a few clear requirements.

• Risk needs to be identified before arrears emerge
• Intervention needs to reflect the severity and cause of pressure
• Decisions need to be supported by evidence that action was timely and proportionate

 

Without that broader view, moving earlier becomes difficult. Showing that intervention happened early enough becomes harder too.

↪Further reading: What to look for in a vulnerability dashboard

Where KYVC fits alongside open banking

This is where Know Your Vulnerable Customer (KYVC) comes in.

It sits alongside open banking data, adding a different layer of visibility focused on change of circumstance, emerging pressure, and early indicators of vulnerability.

Where open banking shows account behaviour, KYVC brings in the signals that sit around it.

That includes:

• High-frequency credit application data
  Capturing changes in borrowing behaviour, including use of credit for essential costs and short-term liquidity management
• Self-declared income and expenditure insight
  Providing a more current view of affordability, without relying on historic snapshots or consent-led journeys
• Employment and income stability signals
  Highlighting changes in working hours, contract type, and earnings consistency
• Life event and household indicators
  Surfacing changes that can affect financial resilience immediately, such as separation, dependents, or caring responsibilities
• FCA-aligned vulnerability characteristics
  Structured around recognised drivers of vulnerability, supporting consistent identification and evidencing

 

These datasets are refreshed frequently and brought together into a single, usable view. The emphasis is on timing, so changes are visible while there is still time to act. And that difference has a direct impact on how portfolios are managed.

• Earlier identification of emerging pressure
  Customers can be flagged before missed payments or formal arrears
• More accurate prioritisation
  Multiple signals can be assessed together, allowing teams to focus on the cases most likely to deteriorate
• Better alignment to Consumer Duty expectations
  Firms can demonstrate that foreseeable harm has been identified and addressed in a timely, proportionate way
• Stronger operational control
  Resource is directed based on current conditions, rather than historic outcomes

 

And more importantly, it reduces reliance on lagging indicators.

So, instead of waiting for performance to change, teams have a view of the conditions driving that change. And that moves the point of intervention forward. Because with it, the likelihood of achieving a better outcome for both the customer and the business.

↪Further reading: Why investing in better vulnerability data pays off for customers and for business

The opportunity: move from visibility to foresight

Firms relying on transactional data alone will continue to identify issues as they begin to surface, at a point where financial pressure is already established and the range of available actions is narrower. In contrast, bringing in external vulnerability signals allows risk to be seen earlier, while customers are still managing and before positions become harder to stabilise.

That earlier visibility changes how intervention plays out.

Contact can happen sooner, support can be better aligned to the underlying cause, and outcomes are easier to influence while options remain open.

It’s a small change in how the data is used, but it shifts the point at which pressure becomes visible. From observing what has already happened, to identifying what is starting to change. And that’s where the value sits.

See what your data is missing

If you’re already using open banking, the next step isn’t more of the same. It’s understanding what sits outside that view and how much earlier you could be identifying risk.

Book a Proof of Value Concept to see how KYVC complements your existing data and highlights vulnerability sooner.