NatWest taps open banking to launch a transaction categorization service for business clients

NatWest recently launched a new transaction categorization service for businesses, thus entering the open banking arena.

The new services will allow its business clients to offer personalized insights to their customers. While businesses will require the customers’ consent, if they get it, they will be able to use enriched transaction data to offer their users benefits like tips on how to manage budget, reduce their carbon footprint, and alike.

Benefits of the new service

NatWest revealed that their new service will come with a number of additional benefits. For example, it will be able to support businesses by providing affordability checks. This means that by checking customers’ eligibility for mortgages, loans, and similar products — businesses would be able to reduce the need for people to upload payslips and provide similar details.

This should save a lot of time and reduce the length and complexity of the procedures. Not to mention that it will reduce the risk of manual error, which will also reduce confusion.

The new service works by linking customer transactions to various categories aligned to FCA standards, and it operates completely automatically. In addition to that, it includes details regarding the spending and whether it is committed or discretionary.

Businesses will also be able to benefit from the new service by using its three-level breakdown of such categories. Next, the service will also offer deductions at source and even the carbon score accompanying every single transaction.

Eligible companies wishing to apply for the service can easily access it by using the extension of NatWest’s existing accounts and transactions API. Doing so will come with a fee, so potential users should keep that in mind.

A start of a new relationship between banks, businesses, and customers

NatWest’s head of API commercialization, Kevin Dearing, commented on the new development, stating that Enriched Transactions, which is the name of the new service, will mark the start of an exciting new relationship between banks, businesses, and customers. This relationship is underpinned by trust, security, and customer consent.

In other words, nothing will be taken from consumers without their consent, but they will have to provide it in order to access the benefits that their banks will be able to provide.

Dearing added: “The new service makes it easier for a wide range of businesses – from merchants to lending providers – to offer customers a more secure and efficient way of verifying their income when carrying out affordability checks. It will also enable businesses to provide NatWest customers with greater insights on their day-to-day spending and their carbon footprint.”