Equifax UK Introduces a New Financial Assessment Tool for Loan Providers
In the face of rising living costs and the impending Consumer Duty standards, Equifax UK has launched two innovative solutions aimed at enhancing affordability assessments for lenders and service providers.
The first solution, Affordability 360, is a comprehensive affordability assessment tool that brings together granular Open Banking data, bureau insights, and statistical data. By blending credit bureau data, real-time transaction data accessed via Open Banking, and statistical estimates, Affordability 360 aims to provide a more complete picture of a customer's income and expenditure.
Craig Tebbutt, chief strategy and innovation officer at Equifax UK, emphasised the importance of these robust and accurate assessments, stating, "The rising cost of living and the new Consumer Duty standards are making more robust and accurate affordability assessments a top priority for lenders."
Equifax UK estimates that using the data in combination is likely to be more predictive of customers defaulting than using declared income and Office for National Statistics (ONS) calculations alone. This could result in a 29% uplift in lender approvals for low affordability customers.
Affordability 360 was recognised at the Equifax UK Awards 2024 in the Best Sector Initiative category. However, no publicly available information was found about which banks and financial service providers use the solution since its launch.
In addition to Affordability 360, Equifax UK has also launched Tariff Connect, an Open Banking solution designed to help utility and telecom providers automate customer eligibility assessments for social tariff discounts. This solution blends Equifax bureau insights, Open Banking transaction data, and statistical estimates from ONS and Minimum Income Standards.
Equifax UK is also collaborating with OneID on a new onboarding solution, aiming to streamline the customer onboarding process for financial service providers.
While 16% of organisations use data from the ONS, 24% still rely on a customer's self-declaration to assess expenditure. The introduction of solutions like Affordability 360 and Tariff Connect could potentially revolutionise the way affordability is assessed, promoting financial inclusion and responsible lending decisions.
Read also:
- Ford Discontinues Popular Top-Seller in Staggering Shift, Labeled as a "Model T Event"
- 2025 Witnesses a 27% Surge in Worldwide Electric Vehicle Sales, Despite Opposition to Electrification Policies in the U.S.
- Recorded surge in electric vehicle registrations during the initial half of the year
- Dubai-bound: Omega Seiki Mobility, an electric vehicle company from India, prepares for assembly establishment
