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Q&A: “Automated credit decisions as a competitive edge”

Open Banking, AI, and real-time data access are reshaping credit assessment across Europe. In this interview, Peter Hiekmann, VP Sales at finAPI, explains how automated decision-making is becoming a strategic tool for digital lenders – enhancing speed, compliance, and customer trust

DLA: Peter, why are automated credit decisions becoming so important for lenders?

Peter Hiekmann: Lenders are facing a double challenge: customers expect a fast and seamless digital experience, while regulators demand transparency and risk control. Automated credit decisions solve both issues. Based on real-time account data, lenders can make well-informed decisions within minutes, instead of hours or days. This doesn’t just improve customer satisfaction – it also significantly reduces operational costs and credit risks.

DLA: What specific technologies are driving this transformation?

Peter Hiekmann: Open Banking APIs are key here. They give regulated third-party providers like finAPI access to account data – always with the customer’s consent. With our solutions, we analyse income and spending behaviour, payment obligations and potential risk factors, such as returned direct debits or irregular cash flows. This level of insight provides, besides credit scores, a valuable affordability assessment and a solid basis for credit decisions and makes them more precise and flexible.

DLA: What role does finAPI play in this context?

Peter Hiekmann: finAPI provides a full toolkit for digital lenders: from account-based credit checks to income verification and fraud detection. Our solution is designed to be easily integrated – often via a simple web link – and can be used without major changes to existing systems. Alternatively, it can be fully integrated into existing systems via REST API, depending on the lender’s preferences. And last but not least, finAPI is BaFin-licensed and PSD2-compliant – essential in a sensitive area like lending.

DLA: Is this approach limited to consumer loans or also suitable for business lending?

Peter Hiekmann: It’s absolutely suited for both. SMEs often lack traditional credit scoring data, but their business accounts contain rich information: incoming payments, liquidity trends, tax payments. With structured analysis, lenders can assess creditworthiness far more accurately – and without lengthy paperwork. That’s why account-based underwriting is gaining traction in both private and commercial segments.

DLA: How is the market responding to these innovations?

Peter Hiekmann: Very positively. According to a 2024 market study by the German Banking Association, 18% of consumers have already taken out a loan entirely online, and nearly 40% of instalment loans involve at least one digital step such as identification or signing. Interestingly, even older consumers are increasingly embracing digital credit processes. And another trend is clear: apps are becoming the dominant interface. In 2024, 70% of German consumers used an app for their banking activities – up from just 17% in 2015. This shift naturally supports digital lenders who rely on fast, mobile-first solutions.

DLA: What about compliance and fraud prevention – are there risks?

Peter Hiekmann: Actually, automation can help mitigate risk. Account data allows identification of real identities and potential risk factors. This helps prevent fraud attempts involving false identities. Combined with identity verification or age checks, Open Banking becomes a robust line of defence against fraud. And when automation adheres to high standards for data security and compliance, it ensures fair, verifiable, secure, and auditable processes – something every regulator will appreciate.

DLA: How do you see the future of credit scoring and lending in Europe?

Peter Hiekmann: The future is hybrid: automated where possible, personal where needed. But the base will be structured, real-time data. With advances in machine learning and data enrichment methods, account data can now support precise affordability checks, cash flow predictions and tailored risk assessments. Lenders who use these tools will gain a clear edge – in cost, speed, and customer trust.

DLA: Buy Now, Pay Later, called BNPL, is gaining ground – especially in e-commerce. What role can Open Banking play in this growing market segment?

Peter Hiekmann: BNPL is undoubtedly one of the fastest-growing alternative payment methods globally, with transaction volumes expected to exceed USD 560 billion in 2025 and a projected CAGR of over 10% until 2030. This surge is fuelled by consumer demand for flexibility and seamless online checkouts. However, the simplicity of access and lack of strict credit checks also raise concerns about over-indebtedness and fraud.

Open Banking offers a viable solution: by enabling real-time access to account information and transaction histories, it allows BNPL providers to assess affordability and creditworthiness more accurately while mitigating fraud risks, before extending financing. This not only helps ensure responsible lending but also supports regulatory compliance as required by new EU directives like the Consumer Credit Directive.

DLA: Beyond B2C – is B2B BNPL a relevant opportunity for lenders and fintechs?

Peter Hiekmann: Absolutely. While the B2C BNPL market has matured, the B2B segment is still largely untapped. SMEs, which often struggle to access traditional credit lines, stand to benefit significantly from flexible, invoice-based BNPL options. According to the Buy Now, Pay Later Report 2025, B2B BNPL is seen as the “next chapter” in the evolution of deferred payment models.

With global B2B payment volumes outpacing B2C by a factor of three, and a USD 2.6 trillion credit gap for small businesses, this is a space ripe for innovation. Here too, Open Banking plays a key role: with enriched financial data and real-time insights, digital lenders can make faster, data-driven credit decisions, reducing default risk while improving SME access to working capital.

DLA: What will the overhauled Consumer Credit Directive change for BNPL providers, and how can Open Banking help them meet the new requirements?

Peter Hiekmann: Most BNPL providers have so far operated outside the scope of existing consumer credit regulation. This will change with the revised EU Consumer Credit Directive (CCD2), which must be transposed into national law by November 2025 and will apply from November 2026. It will require BNPL providers to implement systematic credit risk assessments. finAPI supports this transition with flexible, easy-to-integrate solutions and helps providers to meet the new requirements efficiently and responsibly.

DLA: Thank you for the interview, Peter.

 

Photo Credits:

  • Peter Hiekmann: finAPI
  • Hacker: Vika_Glitter at Pixabay
  • Credit card and laptop: StockSnap at Pixabay