Revolut leverages Open Banking and Algoan’s Credit Decisioning solutions to offer instant personal loans in France

Revolut is a global financial technology company offering banking services to over 40 million customers worldwide. In addition to daily banking products, Revolut developed an offering towards wealth & investment, lifestyle & travel, savings and credit products. Credit is one of the latest additions to Revolut’s French product portfolio, with Revolut starting to offer personal loans to French customers in May 2023.

The need: Offering an instant personal loan experience in France while managing credit risk

With 3 million clients, France is one of Revolut’s most important markets already offering credit products. Revolut is widely known for its intuitive “all things money” superapp.

Therefore, the main challenges were to offer:

• Loan application: offering the smoothest customer journey
• Fully digitalized and paperless process
• Real-time experience and instant in-principle agreement

On top of these challenges affecting the end-customer experience, Revolut needed the right solutions to manage credit risk by instantaneously assessing loan applicants’ affordability and creditworthiness.

With this strategic move, Revolut is looking not only to strengthen its market positioning but also to elevate customer satisfaction through personalised credit solutions and to capture more French customers.

The solution: A fully automated in-app loan application journey  

Revolut quickly assessed that the only way to offer a real-time loan experience to customers is through the use of Open Banking allowing clients to share their banking transaction data, for a precise and quick assessment of the loan application. By doing so, it would allow Revolut to develop a fully digitalized and paperless process for its customers.

Algoan credit decisioning solutions are used by Revolut to enrich the Open Banking data and support Revolut’s decision around 2 areas:

• Affordability assessment: Algoan Credit Insights to categorise all retrieved transactions, detect incomes and expenses, and calculate multiple indicators such as the debt-to-income ratio and disposable income.
• Creditworthiness assessment: Algoan Credit Score is used in order to assess the future borrower's ability and willingness to repay debts. It is based on financial behaviour and not on socio-demographic criterions.

By leveraging Open Banking credit decisioning features provided by Algoan but also by developing a smooth loan application journey, Revolut unlocked instant loan application journeys in which loan applicants can apply for consumer loans ranging from 1,000 to 50,000 euros directly within the Revolut app, eliminating the need for additional documentation.  

Additional features such as self-serve modulation of monthly instalments and early repayment options maximised user automation and flexibility.

"As always, we want to offer cutting-edge experiences to our users, and it quickly became clear that open banking was the right way to go for Revolut in France. Being able to build a fully digitalized and paperless process combined to accurate risk controls is the future of credit. Algoan offers market leading solutions and our collaboration was only evident."

Nadim Chidiac, Head of Lending France at Revolut

The results: A real-time loan experience with a high conversion rate

Although Revolut launched its credit offering in France only a few months ago using a gradual ramp-up in terms of customer eligibility, it saw a high conversion rate for customers applying for loans. Credit risk is also very satisfying thanks to the decision rules in place built by Revolut and informed by Algoan’s Credit Decisioning solutions. Few lenders are able to offer real-time loan application journeys. Revolut was able to offer an efficient and streamlined credit application process, contributing to increased customer satisfaction. The company keeps increasing its volumes of credit month after month and intends to offer new types of loans in the near future.

"Algoan and Revolut collaboration proves that Open Banking is a true revolution when it comes to credit decisioning and real-time loan application journeys. Revolut teams are very agile and were able to test, integrate and go live with our API very quickly. We are thrilled with this collaboration and looking forward to supporting them in the future with new use cases."

Youness Bounif, Chief Product Officer at Algoan

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*Gini is a measure of dispersion between good and bad borrowers on the distribution of the score. Thus, it indicates how accurate the model is in predicting who will default in the next 12 months.