Open banking for referencing: The key to faster, safer tenant income verification

Payslip fraud is on the rise – making up over half of all tenancy fraud* – and it’s becoming harder to detect. Letting agents have traditionally had to manually check payslips, bank statements, and chase employment references to confirm a tenant’s income. While fraudulent applications are rare, just one slipping through the cracks can cost an agent up to £10,000. As fraudsters get better at more advanced with faking documents, agents are turning to safer, quicker ways to verify tenants' income. That’s where open banking comes in. This technology allows tenants to securely share their financial data directly through their bank, offering agents a faster, more secure way to verify an applicant’s income.

What is open banking?

Open banking is a way for banks to share a customer's financial information securely with other companies, with a customer’s permission. 

For letting agents, this makes income verification much faster and safer. Instead of waiting for tenants to send bank statements or payslips, open banking lets agents instantly check a tenant’s financial situation. Letting agents can see right away if the tenant can afford the rent, reducing the chance of errors or fraud and speeding up the whole referencing process.

What financial information can a letting agent see?

Open banking provides letting agents with a total picture of a tenant's financial situation, providing details such as:

• Account details such as the account holder’s name and their balance
• The amount of money coming into an account each month including income, pension or savings
• The amount of money coming out of the account each month, including direct debits and standing orders
• Whether the applicant has historically paid their rent on time (if applicable).

3 ways open banking makes income verification faster and more secure

1) Instant access to bank-verified data

One of the biggest hassles in tenant referencing is the time it takes to gather and check financial information. Tenants are often asked to provide bank statements, payslips, and more, which leads to delays as agents manually go through everything. With open banking, you can instantly access verified financial data directly from the tenant’s bank account. This means you can check their income in minutes, without any paperwork.

2) Eliminate errors and fraud

When tenants have to upload multiple financial documents, you sometimes end up with missing information, mistakes – or, in the worst-case scenario, even fake documents. Open banking solves this by pulling accurate data directly from the bank, so you don’t have to worry about incomplete or altered documents. It gives you a clear and reliable view of a tenant’s financial situation, so you can make better decisions about their ability to afford rent.

3) Secure, compliant data sharing

Handling sensitive financial documents manually, whether it’s paper statements or emailed payslips, can be risky. Documents can be lost, stolen, or exposed to data breaches, putting both agents and tenants at risk.

Open banking is built to be secure. Tenants' financial data is transferred through encrypted channels, and they must give permission for it to be shared. The process complies with GDPR, meaning the data is handled safely and responsibly.

Future-proofing income verification

As tenancy fraud becomes more sophisticated, traditional methods of income verification are no longer enough to keep up. Open banking offers agents a faster, more secure way to verify a tenant's financial situation. 

“A tech-led approach is the only way to spot these fraudulent applications,” says Tom Goodman, Managing Director at Vouch. "Agents and landlords can’t rely on instinct anymore – they need more sophisticated tools to stay ahead of increasingly complex fraud."