How PropTech can leverage Open Banking to transform processes

PropTech businesses have shown remarkable innovative solutions, but may be missing out on streamlined payments and more reliable data. Enter open banking. Read now to discover the limitless benefits open banking can bring to proptech.

PropTech, or property technology, is a sharply rising sector that’s given renewed buoyancy to the real estate industry with optimised solutions for buying, selling, renting, and managing properties. It’s proven to be a booming market across the UK and Europe, but proptech businesses across this region could be missing out on more efficient payments, reliable and trustworthy data, and smarter processes that save them time and money.

What is proptech?

PropTech businesses emerged to uplift various processes that were lacking the necessary tech, from people looking for short-term lets, to supporting buyers finding their lifelong home. Overall, streamlining the processes to save time and money with better payment and data experiences for all users.

A quick look at proptech’s market potential:

  • The UK market anticipates to grow at a CAGR of almost 14% during 2022 to 2028
  • Europe looks to achieve a 15% CAGR during the same period.
  • Germany alone looks to achieve a whopping market valuation of $4137m by 2028

There’s evidently bountiful potential for proptech businesses to grow across this region. But how can proptech businesses achieve the competitive edge?

Enter open banking.

What support can open banking bring to proptech?

PropTech businesses saw the need to improve technology in the real estate sector which traditionally had significant pain-points such as lack of digitalisation, clunky processes, risk of fraud, and no online platform to track application progress. But as technology has evolved over the recent years, so have these PropTech businesses, but there has also been an influx of proptech businesses utilising something more than just better tech. Open banking.

Open banking offers new degrees of transparency and reliability of financial data through an API that make buying and renting properties significantly easier with an enhanced user experience. For agents, the manual lift and risk of error is minimised, operations become smoother, and time is used more efficiently. Open banking can bring efficiency, speed, and safety to the market, thus boosting proptech businesses’ favorability and bottom line.

Let’s take a look at the ways in which open banking streamlines proptech processes across the multiple touchpoints.

Better data consolidation for buyers and sellers

A large portion of buying a home is assessing any risk when taking out the mortgage. Collecting the data, credit score assessments, overview of bank accounts and repayment projections all can be part of a laborious and time-intensive process with a complex paper trail.

With open banking data, this is simplified. Gathering data and getting a comprehensive overview of financial health is faster, more accurate, and less of a headache for agents and the buyers. By aggregating financial data across multiple accounts and credit reports, it can speed up the lending process and ensure they are not loaned an amount that’s unrealistic for them to pay back. This in turn supports the financial wellbeing of the buyer, and gives an accurate risk profile.

For a deeper understanding of how open banking improves affordability assessments, read our article on its impact on the lending industry.

Enhanced KYC and income verification for renters

As we’re seeing the rise of ‘generation rent’ with home ownership rates falling and the number of households renting more than doubled in the past 20 years in England and Wales, it’s clear we need solutions to support the rise of renters.

Renting a property comes with its own range of considerations which the proptech industry aims to solve, including income verification and Know Your Customer (KYC). Renters must have their accounts verified with correct due diligence and identity checks, all of which can be time consuming when the landlord is eager to fill the home. Consider falsified documents, inaccurate references, or sudden inability to pay the rent. Open banking can help prevent these problems.

Open banking provides a secure and foolproof solution to validate bank accounts that keep both landlords and tenants safe. Landlords are given a comprehensive overview of tenants’ financial health and legitimate insight to their income. Onboarding processes become swift and reliable, with no paperwork headache. Tenants are given secure ways to sign tenancy agreements, share their sensitive information, and watch their application progress.

Real-time and secure monthly payments

When it’s time to pay the rent or mortgage, open banking makes this simple too with secure account-to-account payments. Transactions that previously could take days to settle, and with multiple intermediaries were at risk of fraud, now land almost instantaneously. There’s no middleman between sending and receiving the monthly payment, nor are card details shared or stored, meaning less risk of fraud and no additional fees.

Additionally, Yapily’s innovative pay-by-link feature offers a streamlined solution for handling overdue payments. Property managers can easily send a secure payment link to tenants, facilitating immediate and hassle-free payment of overdue rent or utilities directly through the property management portal. This further enhances convenience for both parties and ensures financial obligations are met promptly, without the need for manual follow-ups or complex payment processes.

With safeguarded financial data and Strong Customer Authentication (SCA), all parties have confidence the money lands safely and is protected from fraud.

Collection is quick and easy. The monthly payment is safely paid.

Getting started with Yapily

So, is it time for you to get ahead of the competition and start reaping the rewards that open banking brings to proptech?

Open banking empowers all parties in the real estate industry to feel more confident in the buying or lending process. Estate agents have minimised manual heavy lifting, and people can move into new homes with confidence they’re protected from fraud and their finances are both accurate and secure. With proptech becoming a cornerstone in real estate, integrating open banking seems to only propel it forward.

Let’s get your proptech business started with open banking today so you can unlock these benefits. Speak to one of our open banking experts about how we can help you.


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