Salad’s Alex Marsh Makes the Case for Open Banking in UK Consumer Lending

For UK borrowers with thin or troubled credit files, a record of current income and spending may tell lenders more than an old missed payment. That is the case Alex Marsh is making at Salad, where Open Banking data is used to assess applicants whom mainstream lenders may decline. The commercial question is whether more lenders will use that information to serve a market Salad puts at more than 20 million people.

Marsh, Salad’s group CEO, joined the company as a non-executive director in 2023 and chaired the Salad Finance board before taking the top role. He previously led Klarna in the UK. His argument draws on Salad’s analysis of billions of transactions: people turned down by conventional lenders may be keeping up with bills, managing within their pay and showing signs of responsible money management that a credit score alone doesn’t capture.

What transaction data adds

Credit files are useful records of past borrowing, Marsh said, but they can preserve adverse markers for years without showing how someone is handling money now. Rent payments, regular bills, direct debits and changes in spending can provide a more current view of household finances. “A credit score can tell you a lot about someone’s past if they’ve used credit products, but very little about how they are managing their money today,” he said.

Open Banking can give a lender a view of income and expenditure based on account transactions. Salad’s position is that this additional evidence can distinguish between a borrower who is unable to afford repayments and one whose credit history offers an incomplete picture. Marsh said some applicants rejected by mainstream lenders live within their monthly income and meet their payment commitments.

That distinction matters because credit access affects the cost of borrowing. Salad says customers save an average of £454 on a typical £1,075 loan compared with the lenders otherwise available to them. Marsh argues that, for households with little room in their budgets, the difference can influence whether repayments remain manageable. The alternatives he cited include high-cost short-term credit, doorstep lending and, at the most concerning end, unregulated lenders.

Salad’s figures are company-reported, but they point to the issue Marsh wants the market to examine: borrowers with limited financial headroom can face higher borrowing costs when lenders rely on data that doesn’t reflect their present circumstances. Better information may improve assessment, although it doesn’t remove the need to judge whether a particular loan is affordable.

A market with unmet demand

Marsh describes underserved lending as both a financial inclusion issue and a potential commercial market. He cited roughly £2bn in unmet UK credit demand and an estimate from Fair4All Finance that improved financial inclusion could add about £7bn a year to the economy. The figures frame the scale of the opportunity; they don’t, by themselves, establish how much demand any lender can serve profitably or responsibly.

Salad received more than one million applications last year. Since launching in 2018, it says it has lent over £300m to more than 190,000 customers. Marsh points to those volumes as evidence that the segment has substantial demand. His challenge to mainstream lenders is practical: determine whether their underwriting can assess these applicants accurately enough to serve them within their risk and affordability standards.

Open Banking also has the potential to reduce manual work in underwriting. Marsh said some applicants still have to send lenders bank statement scans and payslips. Transaction data can offer a more direct way to assess current finances, but adopting it requires lenders to decide that the segment is worth pursuing and to build processes around the information.

Affordability and explainable decisions

Using more data raises a central question: can borrowers understand why a lender approved or declined an application? Marsh said Salad aims to base declines on affordability rather than a historic credit marker and to explain the factors behind decisions in language customers can follow. “The aim is not to create a more sophisticated black box; it is to understand someone’s circumstances more accurately and lend only where we believe it is genuinely affordable,” he said.

That standard is particularly relevant when transaction histories inform decisions. More detail can make an assessment more current, but it only helps customers if the lender uses it to make sound decisions and can communicate the outcome clearly. Marsh’s stated position is that broader access should mean a fair chance to be assessed, not automatic access to credit.

Salad says it has embedded benefit checks in its application journey. When the lender can’t offer a loan, those checks may still help applicants identify benefits they could be entitled to. The company reports that its checks have flagged £872m in unclaimed benefits for more than 300,000 applicants. It also says it reports every repayment to major credit agencies through a credit rehabilitation offer intended to help borrowers rebuild a credit record.

From alternative data to standard practice

Marsh’s experience at Klarna informs his view that lending at scale depends on making good decisions with the best available information. “What Klarna taught me is that offering consumer credit at scale, and importantly with sustainable unit economics, is fundamentally a data challenge,” he said. At Salad, he said, that lesson also means reconsidering whether conventional credit systems have served people with lower incomes or limited recent borrowing histories adequately.

Some Salad customers apply when a car repair, broken appliance or unexpected bill creates an immediate need. Those circumstances make affordability assessment especially consequential. A transaction record may help clarify a borrower’s cash flow, but the lender still has to decide whether repayment fits that borrower’s finances.

Marsh wants Open Banking to become a routine part of affordability assessment for underserved borrowers rather than an optional addition. He called a two-year transition an ambitious goal. The pace will depend on lenders’ willingness to adopt the data and use it in decisions that can be explained to customers.

For the market, the test is whether transaction-level insight can translate into responsible lending at scale. Salad’s application and lending figures suggest demand is already there; broader adoption will turn on whether lenders can make current financial behaviour count alongside credit history.

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