When mainstream lenders say no, credit unions often find a way to say yes, or at least take the time to understand why a member is applying in the first place. And you can see exactly why their role is becoming increasingly important with this fact: In 2024, lending by UK credit unions grew by just over 10%, reaching £2.58 billion, at a time when many mainstream lenders were tightening criteria. With some credit unions, it means consumers save £5.6 million – £23.5 million per year in interest payments by avoiding higher-cost alternatives
But 2026 is making that job harder.
More people have irregular incomes, fragmented employment, or credit histories that don’t fully reflect their financial situation. And with the cost of living still squeezing budgets, the line between “manageable” and “unaffordable” is changing week by week.
That creates a difficult balancing act. You want to lend fairly and support members who rely on you, but you also need to protect your loan book while working with lean teams, tight processes, and rising Consumer Duty expectations.
Credit union lending decisions have a direct impact on people’s financial wellbeing and the communities they serve. Fair4AllFinance, for example, reports £24.16 of social impact for every £1 invested, highlighting the wider role community lenders play in supporting financial inclusion.
This is where Open Banking steps in. Real-time visibility of income patterns, spending behaviour, and financial resilience is helping credit unions make faster, better informed decisions and approve applications that would otherwise be declined.
We’re already seeing this in action. Across the UK, credit unions are using Open Banking to speed up loan journeys, improve approval accuracy, and widen access for members who fall outside traditional credit scoring. Here’s how.
| What this article covers How real-time affordability helps lenders say yes more oftenWhy thin-file and near-prime borrowers benefit most from deeper insightPractical examples from credit unions already using AperiDataThe operational improvements that come with automated assessmentsHow enriched transaction data may take this even further in the future |
Why financial inclusion needs better data in 2026
Credit unions continue to play a central role in community finance. In 2025, UK credit union membership topped 2.18 million adults.
That’s because credit unions serve communities that don’t always fit neatly into traditional credit models. Many members work variable hours, earn across multiple jobs, or have gaps in employment that make their financial profile look riskier than it really is. Others simply haven’t built enough of a credit footprint to be scored accurately.
And there are a lot of people who fall into that category. Around 20.2 million adults in the UK are classified as “financially under-served”. Add to this income volatility and cost-of-living pressure, and a significant portion of UK households are now reporting tighter budgets and falling savings.
This demand is already showing up in lending volumes. Broad sector analysis shows credit union lending increased by over £250 million in a single year, outpacing growth in the wider unsecured credit market, which has remained closer to 6–8%.
A major driver is changing employment patterns. The UK has an estimated 1.7 million gig economy workers, many of whom rely on irregular, unpredictable earnings. For these workers, traditional credit scoring and income verification often fail to capture financial stability or resilience, even when their overall income is steady.
For credit unions, this creates two challenges:
- It can force unnecessarily cautious decisions, especially when thin-file members have no way to evidence stability beyond their bank account. Renters are a good example: they are more likely to have limited credit histories despite often managing their finances well.
- It can hide early signs of financial strain, making it harder to intervene before a member reaches a more difficult point.
Consumer Duty adds further pressure. Lenders now need clearer evidence that decisions are fair, data-led, and aligned to a member’s real circumstances. That becomes difficult when the information available at the application stage doesn’t reflect what someone can genuinely afford today.
This is why better data is becoming essential in 2026. To support members fairly, especially those with irregular incomes or thin credit histories, credit unions need a real-time view that shows how people manage their money day to day.
How credit unions are using Open Banking to say yes more often
For many members, the biggest barrier to fair lending is a lack of evidence to prove they can afford to pay. Traditional checks can’t always capture multiple income streams, irregular hours, or steady financial habits that don’t show up in a credit report.
Open Banking changes that. By giving credit unions real-time insight into income stability, spending behaviour, and financial commitments, it fills the gaps that thin credit files leave behind. And it does this without asking teams to sift through bank statements or rely on outdated assumptions.
Seeing income as it really is
Members who work variable hours or rely on multiple jobs often appear higher risk on paper than they are. Open Banking shows their actual earning pattern, when income comes in, how consistent it is over time, and whether it’s trending up or down. It gives credit unions the confidence to approve applications that would otherwise default to a decline.
Understanding affordability with more accuracy
Instead of relying on retrospective data or static estimates, credit unions can now see a member’s essential spending, priority bills, and disposable income in real time. This makes it easier to distinguish between someone who is genuinely stretched and someone who manages their money well but doesn’t have the credit history to prove it.
Reducing friction in the lending journey
Open Banking removes the paperwork-heavy parts of the application process. Members no longer have to find statements or worry about missing documents. Teams spend less time on manual checks and more time supporting the people who need help.
Improving fairness for members who fall outside traditional scoring
Thin-file and near-prime applicants benefit most. Income patterns, rent payments, childcare expenses, or stable spending habits can now be used to support a decision, rather than disqualify it. For many credit unions, this is the difference between saying no by default and saying yes with confidence.
Across the sector, these changes are already having an impact. Credit unions using Open Banking are reporting faster decisions, more accurate assessments, and better lending outcomes for members who previously struggled to be seen by traditional data.
Real-time affordability for thin-file and near-prime borrowers
Thin-file and near-prime members sit at the heart of financial inclusion. They are often creditworthy, but their financial histories don’t give lenders enough to work with. A limited credit footprint can make someone appear higher risk than they really are, even when their day-to-day finances tell a very different story.
This is where real-time affordability becomes essential. Instead of relying solely on backward-looking data, credit unions can now understand what a member can genuinely afford today.
Making thin-file lending fairer
A thin credit file doesn’t always mean a lack of financial responsibility. Many members pay their rent on time, keep up with essential bills, and manage variable incomes well. Open Banking captures these behaviours directly, turning what was previously invisible into usable evidence.
It gives credit unions the confidence to approve applications based on how someone actually manages their money, not how much credit they’ve previously held.
Building a clearer picture of near-prime borrowers
The near-prime segment is often made up of people who have had past challenges or short-term instability. With traditional checks, it’s hard to distinguish between members who are recovering well and those who are still under strain.
Real-time data makes that distinction clearer. Credit unions can see whether income is stabilising, whether essential bills are being prioritised, and whether spending patterns indicate resilience or emerging risk. This supports fairer, more consistent decisions without increasing exposure to bad debt.
Spotting early signs of difficulty
Of course, affordability isn’t static. Small changes like a missed utility payment, reduced income, or rising reliance on credit, can signal that a member may need support. Open Banking highlights these shifts earlier, allowing credit unions to take a more proactive and supportive approach.
Strengthening Consumer Duty confidence
Regulators want to see evidence that affordability decisions are grounded in reality. Real-time insight gives credit unions a clear audit trail and a way to demonstrate that lending decisions reflect a member’s current circumstances, not outdated data.
Case study insights: what credit unions are achieving already
Credit unions across the UK are already seeing what happens when real-time insight replaces manual checks and incomplete data. The results? Faster decisions, smoother journeys, and greater confidence in approving members who would previously have fallen through the gaps.
Below are a few examples from credit unions using AperiData today.
HEY Credit Union
HEY Credit Union wanted to make lending quicker and easier for members, many of whom rely on credit union support during moments of financial pressure. By integrating Open Banking into their existing platform, their team has been able to streamline assessments and remove unnecessary friction from the loan journey.
Their CEO summarised it simply: using AperiData has “streamlined our lending processes and saved valuable time for our colleagues and members.”
Lewisham Plus Credit Union
Speed and efficiency were key priorities for Lewisham Plus, particularly as their membership continued to grow. Open Banking has helped them deliver quicker decisions without compromising fairness or accuracy.
They told us that collaboration with AperiData “will save time and effort for both colleagues and our members,” supporting their mission to provide accessible, low-cost credit to the community.
Salford Credit Union
Salford Credit Union undertook extensive research before choosing an Open Banking and credit referencing partner. They highlighted the importance of a modern, intuitive tool that could adapt quickly to operational needs.
After adopting AperiData, they saw the benefits immediately. When they requested a workflow adjustment, it was delivered within 24 hours, demonstrating how agility and responsiveness matter for small teams managing high member demand.
Unify Credit Union
Member experience is central to Unify Credit Union’s approach. They saw Open Banking as an opportunity to simplify the loan application process and remove barriers for members who might find traditional paperwork challenging.
Their CEO described the collaboration as “immensely productive,” emphasising the support and flexibility provided throughout. Their endorsement of fellow credit unions reflects both the operational impact and the ease of working together.
Moneywise Credit Union
And Moneywise? Their CEO, Lee Williams, said:
“We did extensive market research prior to choosing Aperidata as our Open Banking partner. What attracted us to AperiData was their fresh, innovative approach to the sector. Their Credit Console® product was by far the most modern and user friendly of those we researched. I look forward to working with them and observing the benefits for our colleagues and members”.
What this means for financial inclusion
Financial inclusion has always relied on one principle: people should be assessed on how they actually manage their money, and not how well they fit a traditional credit model. Open Banking brings that principle within reach for far more members.
For thin-file applicants, the change is immediate. Instead of being penalised for limited credit history, their real financial habits become visible. Rent payments, regular income, and consistent essential spending can now support an approval rather than being overlooked.
For near-prime members, real-time data shows whether someone is recovering, stabilising, or beginning to show signs of strain. That understanding helps credit unions make fair, confident decisions without putting the loan book at risk.
It also helps teams act earlier. When spending patterns change or essential bills start to slip, credit unions can step in with support before arrears appear. This strengthens outcomes and builds trust, which sits at the heart of the credit union model.
Most importantly, it levels the playing field. Members who fall outside traditional scoring finally have a way to evidence financial capability. Lenders can approve more applications with confidence, and support can be offered before harm occurs.
This is what modern financial inclusion looks like: data that reflects real lives, decisions that adapt as circumstances change, and fair access for members who have too often been hard to see.
A look ahead: how deeper transaction insight could take this further
Open Banking already gives credit unions a clearer view of affordability, but there is still untapped potential in the data members share. As lenders prepare for Open Finance and the Smart Data environment, many are now exploring how deeper transaction insight could strengthen decision-making even further.
Richer categorisation helps credit unions understand not just what a member earns and spends, but the shape of their financial life. Patterns around essential bills, rising reliance on credit, or regular spending commitments can highlight both stability and early signs of pressure. Automatically surfacing these insights reduces manual effort and supports more consistent assessments.
It also opens the door to more personalised support. When lenders understand the context behind a member’s financial behaviour, they can tailor conversations, repayment plans, or signposting more effectively.
And as regulations develop and members’ financial situations become more complex, these deeper layers of insight will become a natural extension of the tools credit unions already use. Open Banking lays the foundations. Enhanced transaction intelligence builds on that, helping lenders form an even clearer, fairer picture of affordability across their membership.
Learn more about how AperiData works with credit unions to improve financial inclusion through clearer, real-time affordability insight.
