Equifax webinar leads the way for lenders during lockdown

An Equifax webinar, hosted in conjunction with Credit Strategy on 29 April, addressed how companies can utilise new approaches, via Open Banking solutions, to verify income, assess creditworthiness and lend responsibly during this period of financial turmoil. 


With Marcel Le Gouias, managing editor at Credit Strategy, moderating, an expert panel from Equifax, alongside Account Score CEO Emma Steeley, presented their insights to more than 600 attendees - a record webinar audience for Credit Strategy. 


The hour-long session covered multiple topics related to today’s unprecedented financial landscape and how it impacts lenders. This included a regulatory overview, how to factor fluid finances into credit decisions, trends in the credit market, and best practice for lenders in identifying financially vulnerable people and carrying out affordability assessments. 


Robert McKechnie, senior manager at Equifax, reiterated that while customer’s financial circumstances may have changed, and the FCA have issued much needed guidance on the fair treatment of current customers (including payment freezes), there is no new regulation on assessing new credit applicants. As he stressed, this makes existing FCA rules more important than ever, and lenders must take the same stringent approach as before when assessing creditworthiness. 


Dan Weaver, head of innovation at Equifax, highlighted the scale of the challenge facing lenders when carrying out income verification. With 75% of UK households* suffering a drop in income levels, nine million workers expected to be furloughed** and huge numbers experiencing changes in their employment status, verifying present income and assessing likely future streams is complex to say the least. 


Both Weaver, and Emma Steeley of AccountScore, put forward Open Banking solutions as the most suitable tools to deal with credit decisioning in a Covid-19 environment. By obtaining real-time data via customer and credit applicants’ bank statements, lenders are able to form a fuller, more detailed and up-to-date assessment of their current financial circumstances. 


Additionally, the granular and categorised data these solutions offer mean it’s possible to accurately verify income and identify trends in spending, for example compulsory versus discretionary, to inform credit decisions. Advising on best practice for lenders, Weaver also pointed to the role of advanced Open Banking platforms in benchmarking and stress-testing affordability policies in order to refine, improve and adapt existing algorithms to today’s unstable reality. 


Finally, Beth Whelan, head of debt services products at Equifax, discussed the power of Open Banking solutions in predicting financial vulnerability through identifying spending patterns and early changes in consumer behaviour. She also reinforced how important it is for lenders to adopt a customer centric approach, proactively engage where necessary and intervene as early as possible in the customer life-cycle when they are exhibiting clear signs of financial vulnerability. 


Listen to the webinar here



*ONS Opinions and Lifestyle Survey, 3 to 13 April 2020

** BBC News, April 2020