You can verify income with open banking by securely accessing a person’s bank transaction data (with their consent) to identify regular income sources like salary, benefits, or freelance payments. This is done through APIs that retrieve and analyse financial data directly from their bank account, enabling faster and more accurate credit checks.

Unlike traditional methods that rely on static documents or self-declared income, open banking provides real-time, bank-verified data that helps you assess affordability, improve risk decisions, and reduce fraud.

How identity verification through open banking works

Open banking enables access to a user’s account data via secure APIs, with their permission. This allows you to verify income automatically and in real time.

Step-by-step process:

1. The customer gives consent to share their banking data using Strong Customer Authentication (SCA)
2. An open banking API retrieves key details like account holder name, account number, and recent transactions
3. Income is verified by identifying recurring payments (e.g. salaries, pensions, benefits)
4. You use this data to make credit decisions, run KYC checks, or assess affordability
5. In some cases, you can continue monitoring the account to track income over time and support post-loan management

This replaces the need for manual document uploads and allows you to work with live data directly from the user’s bank.

Implementation options for open banking AIS

You can verify income using open banking in two main ways:

1. Connect directly to bank APIs

If you have the engineering resources and regulatory approval, you can build your own integration on top of bank APIs. This approach gives you complete control, but it also requires:

• Managing multiple integrations across different banks and regions
• Handling regulatory compliance (such as becoming a licensed AISP)
• Ongoing maintenance and monitoring

For most companies, this approach is only viable if open banking is a core capability.

2. Use an open banking solution like Yapily

A faster and more scalable option is to work with a regulated Account Information Service Provider (AISP) that provides a single API to connect with thousands of banks across Europe. This simplifies integration and ensures compliance with PSD2 and GDPR requirements.

What to look for in a provider

• Geographic coverage: Confirm the provider supports the countries where you operate or plan to expand.

• Account types supported: Some providers only support consumer accounts. If you need access to business/corporate, joint, or wealth accounts, make sure these are included. Yapily is one of the few solutions with coverage for business, corporate, and consumer.

• Data enrichment: Look for features like transaction categorisation, merchant name standardisation, and recurring income detection. These improve decision-making and reduce the need for manual analysis.

• White-label or hosted options: Some providers offer fully branded flows, while others offer hosted solutions that help you launch quickly without needing to build the entire UI yourself.

• Security and compliance: Your provider should be ISO 27001 certified and fully compliant with PSD2 and GDPR. End-to-end encryption is essential for protecting sensitive financial data.

• Integration support: Developer-friendly documentation, a testing sandbox, and strong technical support will accelerate your time to market.

Yapily Validate

Yapily Validate is Yapily’s income verification solution, used by lenders and fintechs across the UK and Europe. With one API, you can:

• Retrieve and verify real-time income data from connected accounts
• Confirm account ownership and identity details
• Detect recurring income patterns such as salaries, benefits, or freelance payments
• Build custom flows or use Yapily’s hosted experience to speed up deployment

Yapily also offers enriched data through Yapily Data Plus, support for business and corporate accounts, and optional payment initiation services: all through a single integration.

Explore the Yapily API documentation or try it in sandbox to get started.

Use cases for open banking identity verification

Open banking income verification supports a wide range of use cases:

Lending

• Automate affordability checks and underwriting
• Streamline application flows to reduce drop-off
• Monitor income over time to manage loan risk

Read more: Open banking for lenders

Tenant screening

• Confirm income without requiring payslips or PDF statements

Gig economy and freelancer platforms

• Detect multiple or irregular income streams to support non-salaried users

Financial inclusion

• Offer fairer credit options to applicants with limited or no credit history

Government or benefit eligibility

• Verify financial status for accurate entitlement decisions

Open banking benefits over manual methods

Here’s how open banking compares to older income verification approaches:

By using open banking, you create a faster, safer, and more inclusive experience for applicants while improving decision-making accuracy.

Use Yapily for income verification

You can use open banking to verify income by securely accessing live transaction data directly from a customer’s bank account. This real-time data helps lenders and platforms verify earnings, detect patterns, and make faster, fairer decisions.

With a single integration, you can:

• Automate income verification at scale
• Detect recurring payments and financial stability
• Replace slow, manual onboarding flows with real-time data access
• Improve trust, reduce fraud, and serve underserved customers

Ready to see how Yapily can support income verification? Speak with an open banking expert today.

FAQ: Open banking income verification

1. Is open banking income verification secure?

Yes. Open banking APIs use bank-grade encryption, follow PSD2 regulations, and require explicit user consent. Providers like Yapily are ISO 27001 certified and fully GDPR compliant.

2. How long does the income verification process take?

The entire flow can take less than a minute. Once the user authenticates with their bank, data is retrieved and analysed instantly.

3. Can I verify multiple income sources?

Yes. Open banking allows you to detect income from multiple employers, freelance jobs, pensions, or benefits across one or more accounts.

4. What types of accounts can be accessed?

That depends on the provider. Yapily supports consumer, business, corporate, and even wealth accounts, making it ideal for a wide range of use cases.

5. Can I use this data after the loan is issued?

If permitted by the user, yes. Ongoing access allows you to monitor financial health, detect early signs of financial distress, and manage repayment strategies.