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API Banking Enables Real-Time Scoring in Machine Leasing and Finetrading

10. May 2019 / in Trends

Companies rely on leasing and purchase financing in order to optimally finance large purchases. Machinery and other capital goods cost tens of thousands, if not hundreds of thousands of euros. Leasing models and solutions for financing the purchase of goods, also known as finetrading, help to protect equity capital and improve liquidity. They also enable companies to avoid the burden of existing credit lines at their bank.

In practice, however, financing applications are often complicated and slow because not all leasing and credit providers have integrated digital solutions such as API banking or X2SA (Access to Account) into their operations. As a result, some companies whose business is actually geared towards leasing and finetrading solutions are still hesitant to accept financing offers - an untapped business opportunity for financing providers.

Are you already familiar with API banking? If not, we recommend that you start by taking a look at our introductory article about API banking.

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Manual Processing of Applications Negatively Impacts Customer Experience

The underlying causes for this situation lie primarily in risk management, which, from the point of view of finance providers, is a crucial issue in machine leasing and purchase financing. After all, leasing and financing companies only want to enter into contracts with companies that are creditworthy. However, determining the financial situation of a business partner and checking their capital market capability in the conventional, analogous way usually takes some time.

In order to assess the capital market capability and creditworthiness of an applicant company, leasing and finance providers first request a range of financial information and evaluations on the company’s economic situation:

  • Commercial evaluations (BWA)
  • Profit and loss statements
  • Annual financial statements and balance sheets
  • Account statements from the business account or several business accounts

The time-consuming compilation of all these documents alone is enough to send chills down the spine of many companies - and it sometimes proves to be a reason not to submit an application in the first place. The subsequent transfer of this information to the finance provider is usually done in a manual and analogous way. The finance provider transfers all data for the evaluation of creditworthiness manually into their system. The disadvantages of this process are clear for all to see:

  • Process duration: The manual working method is inefficient and unncessarily elongates the application process.
  • Process costs: In addition, the analogous form of processing applications generates considerable personnel costs.
  • Error potential: An error can quickly creep in during manual transmission.
  • Customer experience: The applicant considers the long waiting time and the analogue process to be unprofessional and out of step with today’s digital world.

The result: an unpleasant situation for everyone involved, with long waiting times and a working method that is no longer up to date. In times when companies rely on the digitalisation and automation of business processes as well as on speed and decision-making reliability in financial matters, financing providers are faced with the task of modernising their application processes.

Digital Application Process via API Banking and XS2A

The application process can be significantly streamlined with the help of API banking and XS2A. This is because the multitude of paper-based steps are replaced by a real-time view of one or more business accounts. PSD2-certified Account Information Service Providers (AISP) such as FinTecSystems use a banking API to build an interface to the applicant’s online business accounts.

In order for this to happen, the account holder must grant access to their account via a simple online input mask. However, this is only a formality that the applicant can handle intuitively. They then directly reap the benefits of the digital account view in the form of faster processing times and reduced amounts of paperwork.

In the next step, the transactions in the business accounts are aggregated, categorised and prepared. This way, finance providers receive all the relevant information at a glance - including the profit and loss statement that they need for the leasing commitment or the decision to finance the purchase of goods. In turn, applicants benefit from rapid access to the capital market and a digitalised application process without cumbersome paperwork and endless waiting times.


The growing demand for digital solutions in machine leasing and purchase financing has been obvious for quite a while. Online providers such as Compeon are seeking to offer financing solutions in a simple way on a single platform. Lending institutions and leasing companies that don’t want to lose touch with the digital financial market should make it a number one priority to look into the possibilities afforded by API banking.

For financial institutions and FinTechs, API banking opens up untapped business opportunities in the financial market. Download our free white paper about banking APIs now and discover how new technologies, business models and customer expectations are revolutionising the financial world.

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Schlagworte: Trends

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