Enabling effortless lending with open banking offers great opportunities for lenders. This will result in onboarding clients faster and creates a fuller picture of the client. Creating a smooth digital flow from application to underwriting.
Unfortunately, there are barriers for banks such as:
- Manual underwriting; The associated costs and low quality reduce viability of serving many segments.
- Incomplete and thin files obstruct uncollaterized lending and makes competitive, risk-based pricing difficult.
- Irresponsible lending; Once a client is in need of a loan, they may not share the full picture. This results in a high change of excessive debt burden or defaults.
Fyndoo makes implementing Open Banking (PSD2) a breeze:
- Determine loan affordability based on PSD2 transaction data.
- Use an extensive taxonomy of 24 main purpose categories and 101 sub categories.
- Use this data in your risk model, price model and acceptance criteria.
- Monitor loans automatically and receive preventive signals.
- Fyndoo works with selected AISPs (Account information Service Providers) to retrieve account data.
The benefits of implementing Open Banking are:
- Determine affordability; Machine learning (ML) is used to categorise client transactions and provide meaningful data for determining affordability.
- Digital process; A lot of manual actions can be automated and partial and inferior solutions (like OCR for scanning income statements) can be phased out.
- Reduce risk; Use clean, standardised and real-time financial transaction data to inform your risk model. A transaction is not an interpretation; it is a fact!
Do you want to know more, please download the Open Banking for Lenders brochure 👇 .