Open Banking: A Key Partner for Credit Management

Sarah Thue
February 7, 2024
5 minutes

In the world of financial services, credit management companies serve as crucial navigators, guiding consumers through the often turbulent seas of debt and credit. Working behind the scenes, they help individuals and businesses steer clear of the rocky shores of financial distress by managing debts, collecting payments, and advising on credit decisions. Yet, we are seeing a massive untapped potential among credit management companies to leverage the benefits of open banking.

Because these companies are not merely mediators between creditors and debtors; they are the bridge to healthier financial futures. By utilizing the full scope of open banking capabilities, credit management companies can offer a variety of benefits for its end users and company as well. In this article, we’ll dive into what open banking can offer credit management companies and what to consider to stay ahead of the competition.  

What is Open Banking?

Open Banking enables financial service companies to utilize payment and data services easily through a single unified bank API. For credit management companies, open banking offers a more efficient payment solution and better customer experience via direct account to account payments.

Open Banking: A Key Partner for Credit Management

Credit management companies often perform a balancing act between recovering debts for creditors and offering manageable payment solutions for debtors. They negotiate, they remind, they strategize – all in a day's work to keep credit ecosystems fair and functioning.  

This is where open banking comes into play is streamlining the payment process enabling both the consumer and the creditor to resolve the debt faster. It does this in several ways:

  • Offers a user-friendly payment experience that is mobile-friendly and reduces manual entry and mistakes.
  • Provides payment transparency and easy tracking via real-time payment statuses and embedded remittance information (OCR, KID, account name, etc.) reducing manual processes for the agency
  • Settles near-instantly allowing the debt to be cleared faster

In essence, it's about making the entire debt management process more efficient and user-friendly.

Faster payments and settlements

With open banking, payments are no longer a waiting game. Transactions happen in real-time, reducing delays and improving cash flow for everyone involved. For credit management companies, it means an up-to-the-minute accurate picture of a consumer's payment status, reducing the number of reminders that must go out. For consumers, this means no more uncertainty over whether a payment has gone through and no annoying reminders after they have paid.

How Axactor uses open banking to streamline payments

Axactor, one of Europe's top debt collection companies, implemented A2A payments via Neonomics Payment Initiation service and has seen positive results including high conversion rates and lower transaction costs. Using Neonomics, end users can see an overview of their account balances to choose the best account to pay with without having to leave the payment portal. They can then make a same-day payment or schedule their payment to be processed on a day that is more convenient. According to Axactor’s Chief of Operations, Arnt André Dullum, the integration within their online and mobile platforms has led to an impressive uptake by users and a steady increase in transactions.

Learn more here > How Axactor is taking debt collection into the future with open banking

How Kredinor uses open banking to enhance customer experience

Norway's largest debt collection agency, Kredinor believes that responsible credit management plays a key in creating healthy economic conditions for both businesses and consumers with a strong focus on customer needs and customer-driven development. Their mission is to help consumers regain financial health quickly and at a lower cost. To achieve this, they implemented A2A payments via Neonomics Checkout, an easy way to integrate payment solution that reduces friction and simplifies the payment process. Using open banking, Kredinor has simplified the payment process by automating the transfer of invoice details to reduce errors, improve tracking and shorten resolution time.

Learn more here > Kredinor: Making debt collection more sustainable with open banking

Looking ahead

With Open Banking, credit management companies can deliver a future where the payment process is more user-friendly and offers better support to the debtors on their journey towards financial recovery. The experiences of both Axactor and Kredinor show the impact that open banking can have on companies and debtors, setting a benchmark for others to follow. As this technology becomes more widespread, we can expect to see significant improvements in how debts are managed, benefiting companies, debtors, and the economy at large.

Would you like to learn more about how your business could benefit from open banking? Let’s talk!

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Neonomics AS is licensed as a Payment Institution (PI), Payment Initiation Service Provider (PISP) and Account Information Service Provider (AISP), issued by the Norwegian Financial Supervisory Authority (Finanstilsynet) passported across the EU.