Canopy has been awarded £50,000 to develop its RentPassort product.
The idea of the RentPassport is to give tenants a digital rental identity so any agent or landlord can check on their income and credit history.
Renters also get access to Canopy’s rent recognition service to build their credit score and its alternative deposit scheme.
The money has come from innovation charity Nesta as part of its Open Up 2020 Challenge aimed at firms making use of Open Banking technology.
Canopy is one of 15 firms that has received £50,000 each, and the winner, to be named next July, will get a further £150,000 to £200,000.
The businesses also receive non-financial support including marketing, business mentoring and service design.
Tahir Farooqui, chief executive of Canopy, said: “We are thrilled about the opportunity to work with Nesta Challenges to promote greater financial resilience for millions of renters.
“Over 11m people in the UK have less than £100 in savings. We have pledged to return £1,200 back to renters’ pockets, by eliminating rental deposits by 2025.
“We also want to boost renters’ financial wellness, so they can get on to the property ladder.”
Chris Gorst, director of challenges at Nesta Challenges, said: “Whether it is gig economy workers, 18 to 35-year-olds, or more vulnerable groups, millions of people across the UK are struggling to keep on top of their finances.
“The financial services sector has been slow to respond to society’s evolving needs, whether it’s better serving the UK’s renters, fraud prevention for the vulnerable, or helping those with an unpredictable income manage their finances and get a mortgage.
“The Open Up 2020 finalists are addressing these issues – and more – using Open Banking to make it easy for people to overcome some of the real-life issues they are dealing with every day.
“Among other areas, the solutions have the potential to change the UK’s rental market, help people avoid expensive or unnecessary debt, and allow young people to save and proactively find people the best deals.
“We see this as the start of a big consumer-friendly shift in financial services.”