Get ready for better digital affordability assessments

2 min read|Published August 11, 2022
Get ready for better digital affordability assessments

Analysing whether or not a consumer can make repayments on time is a challenge faced by all lenders – regardless of the size of the loan. However, the challenge doesn’t end there - the digital transformation of financial services has led to a multitude of new ways for banks and lenders to connect to their customers which has created a pressure to improve the end user experience. Additionally, banks and lending institutions are seeking to decrease fraud cases, have a solid portfolio and comply with regulations at the same time.

TL;DR – Quick summary
  • Banks and lenders are actively searching for ways to reduce fraud cases, build a solid portfolio and comply with regulations

  • Open banking can help validate income and expenditures of applicants to give a clearer picture of their creditworthiness

  • Tink is soon launching a new product called Expense Check, aimed at providing a more accurate look into ongoing expenses

TL;DR – Quick summary
  • Banks and lenders are actively searching for ways to reduce fraud cases, build a solid portfolio and comply with regulations

  • Open banking can help validate income and expenditures of applicants to give a clearer picture of their creditworthiness

  • Tink is soon launching a new product called Expense Check, aimed at providing a more accurate look into ongoing expenses

How open banking technology can help

A lender will typically look at the financial circumstances of each applicant to decide whether the loan will be suitable for or not. There are a variety of criteria and methods used by lenders based on the size, collateral, and type of loans. Validating the income and expenditures is the early stage of credit assessment. 

At Tink, we have a product for instant income verification called Income Check. Now, we are building a new product for identifying and assessing the expenditures of applicants in relation to affordability, which includes categories such as:

  • Housing costs (rent, property tax)

  • Loan payments (mortgage payments, interest, amortisation) 

  • Utilities (electricity, heating, water)

  • Transportation costs (fuel, leasing, public transport)

  • Insurance (vehicle, property)

Our new tool, Expense Check, will analyse the consumer’s data and deliver it to you through our API, enabling you to assess the applicant’s affordability in minutes instead of hours, or even days. 

Using open banking technology to power lending benefits businesses as well as consumers, as it prevents consumers from borrowing money they can’t afford to pay back – decreasing the amount of NPLs and boosting lender profitability.

Expense Check is scheduled for release very soon and is set to change the future of lending. Want to be part of that change? Get in touch.

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