NatWest to Provide Transaction Categorization to UK Clients as Extension to Open Banking APIs

NatWest has launched a new transaction categorization service called Enriched Transactions, which is available to businesses, such as Account Information Service Providers (AISPs) and lending providers, to integrate with their apps and digital platforms.

By making the API-enabled service available to businesses, NatWest claims it is “the first UK bank to offer transaction categorization as an extension to Open Banking APIs.”

With customers’ consent, businesses can use Enriched Transactions data to give customers personalized insights – for example, tips “on how to manage their budget or reduce their carbon footprint – helping customers gain more control over their finances.”

The new service can also “support businesses with affordability checks – for example, when checking customers’ eligibility for a loan or a mortgage.”

This could reduce the need for customers “to upload payslips, helping them save time and reducing the risk of manual error.”

The new service works by automatically “linking customer transactions to categories aligned to Financial Conduct Authority (FCA) standards, plus includes details on whether spending is ‘discretionary’ or ‘committed’.”

The service can also provide businesses “with a 3-level breakdown of those categories – more than any other market offering – as well as deductions at source and the carbon score for each transaction.”

NatWest’s analysis of customer transactions “has shown that the service can categorize up to 89% of transaction types, with up to 98% of transactions being categorized accurately.”

This makes the service one of “the most accurate categorization tools in the market.”

Barry Connolly, Managing Director Everyday Banking at NatWest Group, commented:

“Helping our customers thrive financially today and tomorrow with simple and easy everyday banking is central to our strategy. We have helped over 3m customers by providing insights on how to improve their personal financial wellbeing, better manage their budget and build regular savings habits. This is possible due to our focus on innovation and data led experiences like Enriched Transactions, where our high accuracy increases the ways we can help add value for our customers.”

AISPs who want to use Enriched Transactions “to categorize NatWest customers’ transactions can access the service through an extension to NatWest’s Accounts & Transactions API.”

In addition, both AISPs and other businesses, “such as lending providers, who want to categorise transactions for customers of all banks, can access the service through NatWest’s Categorisation as a Service API.”

In the months ahead, NatWest will be looking “to sign deals with AISPs and other businesses who wish to use Enriched Transactions.”

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