If you’re looking for an income verification API, you may be a lender experiencing one or all of the following issues:

• Your current income verification system makes application flows slow and cumbersome, leading to incomplete application requests and user drop-offs.
• You want to launch your lending product into new European markets, but your current income verification solution doesn’t offer data services in certain regions.
• Existing income verification methods don’t update in real-time, making them less effective for longer loan origination cycles. AIS enables a more dynamic verification mechanism that adapts as financial situations change.
• Managing post-loan collections is a challenge without ongoing visibility into borrower finances. With AIS, lenders can continuously monitor balances to improve risk management and repayment strategies.

As open banking experts, we know how valuable data access can be for lenders who need to make underwriting decisions quickly. We’ll share how open banking works for income verification and walk you through what to look for in an API provider.

In this article, we cover:

• How income verification works through open banking
• What to look for in an income verification API
• How to validate income through Yapily’s API
• Go beyond income verification with Yapily
• How Yonder accesses data with Yapily to create a more inclusive approach to lending

Looking to implement an income verification API right away? Yapily can help. Check out our API documentation and get in touch with us today.

How income verification works using open banking

For decades lenders have manually requested PDF bank statements from consumers and processed this fragmented financial data to assess creditworthiness. It’s an outdated and substandard method that’s now been superseded thanks to modern financial technology solutions.

Open banking provides instant access to up-to-date consumer account data through a single API. This real-time data access makes it easy for you to access transaction and spending data, assess creditworthiness for underwriting, and personalise loans based on individual circumstances.

Open banking data services (account information services) enable you to connect with banks’ and financial institutions’ open banking APIs, so you can easily identify spending patterns from transaction data. For example, if you’re verifying a customer’s income, you can distinguish between salary payments, benefits, and irregular deposits to gain a clearer picture of their financial stability.

What to look for in an income verification API

Companies that provide open banking data services are called account information service providers (AISPs). Every AISP is different. To ensure the income data verification API they’re offering will meet your specific business needs, consider a few aspects before you decide on using their services.

• Geographical coverage. If you’re planning to launch your product into new regions, be sure the AISP you choose can support your target markets.

• Account connectivity. You may want access to certain types of accounts depending on your business model, but not all AISPs excel at connectivity: for example, many AISPs don’t connect with business accounts, which might be a deal breaker for you.

• Data enrichment. Consider AISPs that provide raw transaction data enriched with transaction categorisation and insights. This helps you identify spending patterns, income sources, and potential risks more efficiently.

• White-labelling. You can ensure a more consistent and trustworthy experience for borrowers with a white-label solution that keeps your brand top of mind.

• Security and compliance. Ensure your AISP adheres to the highest security standards and complies with relevant regulations, including data privacy laws like GDPR. Secure data sharing using technologies like end-to-end encryption maintains customer trust and protects their sensitive financial information.

• Integration support. Ensure the API is easy to integrate with your existing systems and workflows, reducing disruption during onboarding and maximising time-to-value. Check the provider’s website for robust documentation, developer tools, and responsive customer support.

How to validate income through Yapily’s API

As an open banking infrastructure provider, Yapily offers a robust API for income verification through a solution we call Yapily Validate.

Yapily Validate allows you to confirm customer details and account ownership across the UK and Europe, facilitating your Know Your Customer (KYC) checks and lending decisions.

Here’s how the verification process works with Yapily Validate:

1. Request customer consent using Strong Customer Authentication (SCA). The customer securely approves data sharing through their bank.
2. Initiate the data-sharing request via Yapily’s API. The bank returns key account details, including the account holder’s name, account number, and balance.
3. Retrieve and analyse income data by accessing transaction history. The API identifies regular salary payments, freelance income, or benefits.
4. Use the verified data for decision-making: such as assessing affordability, enhancing KYC checks, and streamlining lending or onboarding processes.

Enable continuous monitoring for ongoing financial insights. With long-term access (where permitted), lenders can track income stability and sufficient balances over time, helping to proactively manage loan delinquencies and support vulnerable customers.

Yapily Validate can be integrated into your existing applications. You have the flexibility to design and host your own user-facing screens while Yapily securely facilitates data connections in the background.

Curious to see Yapily Validate in action? Explore a sample integration via our tutorial.

Go beyond income verification with Yapily

Yapily is both an account information service provider (AISP) and payment initiation service provider (PISP) with coverage in 19 countries across the UK and Europe. This means we can offer some of the broadest coverage of open banking data and payment services on the continent.

Unlike many providers that focus solely on consumer accounts, Yapily also supports business, corporate, and wealth accounts, enabling deeper financial insights and more advanced use cases for lenders, fintechs, and financial institutions.

Here are three benefits to using Yapily for income verification:

1. Enrich customer and business data with Data Plus

Income verification is just the starting point. Yapily Data Plus enhances raw transaction data with advanced enrichment capabilities, providing deeper financial insights that go beyond standard AIS solutions. By transforming unstructured banking data into clear, categorised, and actionable intelligence, it enables more precise decision-making with minimal effort.

Whether you’re assessing affordability, improving risk models, or delivering more personalised financial products, Data Plus gives you a complete and structured view of customer and business finances.

You can access more detailed and valuable information without additional effort with Yapily’s Data Plus. This enriched data solution improves, organises, and categorises transaction data, allowing you to make more informed decisions than with a typical AIS.

Data Plus allows you to enrich the data in the following ways:

1. Standardise merchant names. Banks often make merchant details hard to understand, for example, by using obscure codes or reference numbers. Yapily’s data enrichment standardises business names instead of a cryptic string of characters.

2. Transaction categorisation. Yapily Data Plus groups transaction data into logical categories, providing you with a better understanding of spending habits and income streams. Categories can range from clothing, entertainment, or groceries for consumer purchases to operational costs and travel expenses for business transactions.

3. Recurring payments or income. You can also differentiate between one-time transfers and recurring transactions. For example, you can see whether large purchases are one-offs such as household items, or recurring payments such as mortgage or debt consolidation payments. This allows you to build a comprehensive overview of a customer’s financial profile for precise and well-informed credit decisioning.

4. Payment processors. You can also see what payment processors were involved in the transaction.

This information can be used to make more personalised lending decisions and offer more relevant products and services. You can have a complete picture of customer data, no matter your business model (B2C or B2B), use case, or transaction volume.

For example, the community lending solution, Salad Money, accesses real-time enriched data through Yapily. They can retrieve and analyse up to two years of transactional data to give NHS and public sector workers an automatic review of their benefits and credit entitlement. This has enabled Salad Money to lend £20+ million to over 19,000 individuals.

Discover more about the Salad Money-Yapily partnership

2. Complement your data with payment services across the UK and European markets

Many open banking solutions will only offer payment or data services, requiring multiple providers to satisfy your data and payment service needs. This complicates your user flow experience and your internal operations management as you juggle multiple APIs, infrastructures, contracts, costs, and contacts.

With Yapily, you can serve both data and loan repayment solutions via one API—for both consumer and business accounts. This means you can onboard new customers, assess risk (by verifying income information), and set up repayments for your lending products with one single API integration. If you don’t need payments immediately but think it might be useful in the future, you can start with data services, and then integrate payments later.

Our payment solutions include single and scheduled payments as well as the ability to add product such as variable recurring payments (in the UK only) and Bulk Payments.

You’ll also have wide coverage across Europe. We connect with nearly 2,000 banks, including the major hubs of Germany, France, the Netherlands, and the UK.

3. Integrate a flexible API solution that increases customer trust while enabling a seamless user experience

With Yapily, you can protect sensitive customer data and maintain customer trust, while ensuring compliance and reducing risks. You’ll have top-tier security infrastructure and data encryption that meets stringent regulatory standards. We are ISO 27001 certified and fully GDPR and PSD2 compliant.

With Yapily, you’ll also have the flexibility of using a white-labeled solution or ready-to-use hosted payment and data solutions. You can choose to start with our hosted pages for a quick time-to-value while building your bespoke solution on our white-label infrastructure. This allows you to meet customer demand quickly while developing a solution that gives you more control over the user experience, helping to reduce friction, build trust, and improve conversion rates.

Want to see Yapily’s income verification API in action? Test it out in our sandbox environment and experience seamless data access today

How Yonder accesses data with Yapily to create a more inclusive approach to lending

Through its partnership with Yapily, the credit card provider Yonder uses open banking to get a full understanding of an applicant’s income and financial profile. Their goal is to create a more inclusive and accessible credit system, especially for those with limited credit history which traditional scoring systems often exclude.

With Yapily, Yonder accesses real-time bank account information,** including income and expenses, via a secure API.** Validated and real-time access to data enables Yonder to have a complete customer credit profile for quick and accurate lending decisions.

This data-driven approach to lending allows Yonder to:

• Offer higher credit lines at lower interest rates compared to traditional lenders.
• Provide a more inclusive and accessible credit system.

Yonder also uses Yapily Payments to facilitate credit repayments. Combined with Yapily’s data solution, Yonder has achieved:

• Rapid adoption of open banking payments, with a 1500% growth since April 2022.
• 23% of Yonder customers accessed credit for the first time.
• £3.5 million in balance payments processed through open banking.
• An average increase of 132% in monthly payment volumes.

These milestones have helped Yonder rank high in customer satisfaction. They have a Net Promoter Score of +77 and 98% of their Trustpilot reviews are 5 star.

“With open banking, we’re bringing back fairness and equality to the credit industry. Yapily’s technology and open banking expertise are helping to make that vision a reality.” — Tim Chong, Co-Founder CEO at Yonder

The Yapily-Yonder partnership shows the potential of open banking in creating a more inclusive and customer-centric credit system by using real-time data access and validation.

Learn more about the Yonder-Yapily partnership.

Gain deeper financial insights on consumer and businesses with Yapily

With Yapily, you can integrate an open banking API to speed up and improve the accuracy of loan applications and streamline customer onboarding.

You can enrich data, build a solution specific to your customers’ use cases, and offer customers repayments across multiple European countries. You can do all of this through one provider and a single API integration to eliminate complexities and start underwriting more quickly and accurately.

Ready to integrate an income verification API? Speak with one of our open banking experts today.