April 25, 2023

Streamline Tenant Referencing with Open Banking & Identity Verification

Peter Williams & Makena Ehnisz

Updated on June 02, 2023

Every year, around 6 million UK renters move to a new home. Each time, often they must undergo an outdated and manual process. Yet tenant referencing is a crucial part of the letting process for landlords and letting agents to assess the suitability and reliability of potential tenants. Letting agents need to  ensure that tenants are likely to pay rent on time, maintain the property, and comply with the tenancy agreement. However, this process is time consuming, requiring  checks across multiple separate providers and collecting in information from tenants takes time. The process typically involves conducting credit, employment, landlord, identity, and right-to-rent checks on separate systems, creating an administrative burden for the letting agent and additional stress for the applicant.

Whilst referencing companies are striving to make the process more streamlined for both the tenant and landlord,  the best way to do this is by digitalising as much as possible - from one system. Here's how Plaid can do just that:

1. Verify tenant identities

Plaid can verify tenant (and landlord) identities in as little as 30 seconds with a pass rate of 91%+. Our identity verification product cross-checks an applicant's identity, including their name, date of birth, address, and national insurance number against a range of data sources to ensure that it is accurate and up-to-date. This process not only protects landlords from potential losses but also helps to maintain the integrity of the rental market as a whole.

With all this provided in one API, referencing companies can streamline their manual processes without increasing processes and systems. But it also means a seamless, faster experience for tenants. They can easily upload all their documents and run a digital selfie check. No matter where in the world the tenant is from, they can go through a friction free flow and get into their new home without delay.

Plaid’s Identity Verification Flow:

2. Affordability Checks

Open Banking enables companies to streamline the tenant referencing process including instant affordability checks. By allowing prospective tenants to share their bank data, the referencing company can verify the applicant’s income and assess their ability to afford rent payments. Rather than asking for manually uploaded bank statements, the financial data can be automatically processed and analysed, saving time for both the landlord and the tenant. 

This process also means documents cannot be falsified or doctored. Using real-time, reliable data, referencing companies can be confident in giving more safe tenants access, minimising risk. 

Plaid’s Income Verification Flow:

Customer Case Studies

By leveraging Plaid’s open banking network, Mashroom has supercharged its’ rent automation system so that payments are made and reconciled instantly and securely. Landlords get an instant rent collection and tenants eliminate any human error in sending funds to the wrong place. 

We are excited to bring our Open Banking and payments stack over to Plaid to deliver a scalable and reliable service to UK residential property. It took us just 2 weeks from first contact to live in production with thousands of customers - unreal stuff!

- Alexander Badalyan, CFO & Co-Founder of Mashroom.

Another customer performing referencing checks, Canopy uses open banking to help customers build up their credit scores with CanopyGrow. Customers can report their rent payments to credit agencies via Canopy to ensure that timely rental payments positively impact their credit scores. This empowers tenants to prepare for referencing in future.

Apollon also utilises Plaid’s full suite of solutions to streamline rental payments, deposit collections, identity verification, and affordability. Landlords love their intuitive platform, which is disrupting the sector! Their mission is to make rental easy, and accessible, at scale.

Get In Touch

If you think your team could benefit from these streamlined solutions, don't hesitate to reach out. The future of tenant referencing is bright for both landlords and tenants, and we're here to help you make the most of it.