As we all know by now, OB requires banks to share their line-by-line detailed customer statement data with other parties. This data, which has always been jealously guarded by the major banks, is now available to all lenders (with the agreement of the finance ap- plicant) via account information service providers. With an applicant’s permission, months of transactions can be probed. Read-on- ly data comes directly from the bank that holds the current account to the AISP, so there is no scope for fraud. And it is supplied in real time. Someone applies, agrees to limited time frame and read-only access to their accounts, and thousands of lines of transactions can be analysed. In milliseconds, this can pull out salary details and all finan- cial commitments, to be then tested by algorithm. Lenders – for the first time – can make an affordability assessment that is ex- tremely accurate. Obviously, the key thing about this is that once you have such accurate and real-time information, the automat- ed decision software can produce a bespoke interest rate and term that exactly matches the circumstances of
the applicant. And all this is done digi- tally and, as mentioned, in seconds. No more paper applications, no more la- borious supplying of paper ‘proofs’, no manual underwriting of loans, no more two-week wait for a decision. The OB tech has other benefits. Mis- takes are eliminated. Loan manage- ment is made much easier. A bor- rower’s bank transactions are usually obtainable within a 90-day time frame, so, if a first payment is missed, the account can be constantly interrogated so a request payment call can be timed when there are sufficient funds in an account. Ah, I hear you say, what about the ques- tion of implementation timescale and IT expertise availability? Well, neither of these need apply. There are platforms – such as our OpenBank- Vision (#OBFREE) – that are available off-the-shelf. They can be white labelled and made to work within hours. We can have OBV working on the day a con- tract is signed. Such platforms have the benefit of being tried and tested. The platform could even be free (as Open- BankVision is). Finance providers that are using this sort of know-how have been able, in an
instant, to move over to ultra-flexible product offerings tailor made to a bor- rower and, at the same time, dramati- cally improve their affordability checks. So, for those lenders who are still happy to stick with the status quo, all I can hope is that they think of me when they next go into a newsagent to buy a bar of chocolate.
Above: LendingMetrics Managing Director and CTO Neil Williams
+44 (0) 2394 211010 | www.lendingmetrics.com
Metrics Monthly | 11
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