TransUnion launches Open Banking early adopter programme

TransUnion (formerly Callcredit), the global risk and information solutions provider, has launched an Open Banking early adopter programme after receiving permission to operate as an Account Information Services Provider (AISP) from the Financial Conduct Authority (FCA).

Following extensive testing and consultation with a range of clients across a number of industry sectors, TransUnion Open Banking offers an end-to-end Open Banking service, specifically designed to assess income and expenditure, affordability and creditworthiness. The new service combines all of the elements required for clients to access and utilise the UK’s new Open Banking initiative, and provides consumers with a trusted route to realise the power of their own financial data.

An easily-integrated solution
TransUnion Open Banking has been designed to enable greater engagement of consumers and more informed lending decisions. The API-driven, specially built categorisation and insight engine is a one-stop-shop Open Banking solution and includes:

Screen flow – End-to-end screen process that takes the consumer through the required consent notifications, authentication and authorisation process with their bank
API hub – Connection to the consumer’s bank to retrieve the transactional information that has been consented
Categorisation & Open Banking Report – Consented data is categorised and an Open Banking Report (OBR) with over 2,000 predictive credit and affordability characteristics generated
Data delivery – Data is sent back to the client via API or via TransUnion Decisioning Platforms. The data is then used to inform customer interactions

Will North, core credit director for TransUnion explains: “We’ve developed a service that can be easily deployed across any existing infrastructure, whereby clients can select the elements they require with minimal need for integration.

“There has been a lot of noise about Open Banking but many in the market have been left wondering what to do, either unable to make the necessary investment needed for an in-house solution or unsure of what benefits it can truly bring. One of these benefits for businesses is enhanced data and insight, so this is more relevant than ever in light of the FCA’s new rules on affordability assessments, which came into effect on 1st November 2018.

“We’ve already tested a number of use cases with multiple businesses, including leading financial services providers, and are now launching an early adopter programme which means clients and their customers can benefit almost immediately.

“In the property sector, for example, we’ve been working with businesses that are keen to use Open Banking for tenant vetting, by identifying income and expenditure, employer information and rent recognition, and helping ensure a smoother application process for prospective tenants. The visibility of rental payments can also assist lenders when assessing mortgage applications for first-time buyers that are keen to utilise their rental payment history to help demonstrate affordability.

Categorisation is the foundation, analytics is the key
TransUnion Open Banking uses specially built proprietary technology and enables data to be classified into 20 macro groups and more than 175 sub-categories through the categorisation engine. Categorised data is then processed through a number of analytical models which focus on salary, expenditure, affordability and creditworthiness. These models will be tailored for different sectors and requirements to help ensure relevance and accuracy, and are being developed to complement TransUnion’s existing affordability and credit products.

David Firth, head of product for TransUnion Open Banking, adds: “A smooth customer journey that fully informs consumers of their rights and what the data will be used for is essential. Equally, once the data has been provided it is imperative it is used for the benefit of the customer, and that starts with accurately categorising and analysing the information received.

“Open Banking isn’t just about gaining consent, it’s about helping both the client and consumer benefit from more informed decisions and tailored services and products. There’s a lot of anticipation, given the power of the data which Open Banking unlocks, and we’re confident we can deliver on this vision and help make it a success.”

‘Maximum borrowing’ most searched term as Knowledge Bank reveals brokers’ final criteria searches of 2018

Knowledge Bank’s Criteria Activity Tracker has revealed the top five, most searched criteria by brokers during December with maximum borrowing high on the agenda for four categories out of eight.

In the last month of 2018 broker activity remained high and although December is traditionally a slower business month, there was little or no let-up in brokers searching for a home for their clients’ mortgage requirements.

Knowledge Bank now contains over 80,000 pieces of criteria from more than 150 lenders and the index reveals the searches brokers perform prior to mortgage product sourcing. This enables brokers to whittle down the lenders that will actually consider their clients unique circumstances avoiding unnecessary effort and delays from failed applications.

Since making its first appearance in November, ‘Help to Buy’ remains in the top five residential searches for the second month running, however ‘capital raising – debt consolidation’ appeared for the first time, perhaps indicating that some borrowers already know that they were over-spending even ahead of Christmas happening and were already planning how they were going to pay for it. Making up the other places in the residential sector are the consistently searched ‘Maximum Loan to Age’ and ‘Self-employed borrowers with one years’ accounts’.

It was all change for the final month of the year for equity release searches. Brokers’ top search when interrogating the Knowledge Bank system was to find lenders who would lend to non-borrowing occupiers. The second most popular search was for lenders who would lend on Grade 2 listed buildings suggesting that there are a number of premium properties coming back onto the market.

Lenders who offer the highest LTV continue to be the top search in the second charge sector indicating that there are a good proportion of people still looking for maximum borrowing. The second most searched for criteria in December was for lenders who would consider applicants classed as all benefits with no earned income which shows the search for additional debt even from people with no earned income, again perhaps indicating that some people are overspending in the run up to Christmas, or perhaps that more people are looking to escape the rental market and buy property instead.

Within the self-build sector, maximum LTV remains the top search for a second month for those looking for self-build mortgages suggesting that borrowers are continuing to stretch their finances to make the self-build dream a reality.

December’s index reveals that regulated bridging was the top search within the bridging sector for the third time in four months. Regulated bridging is of course a loan secured against residential property and this, rather than the commercial sector seems to be driving growth in this market.

Nicola Firth, CEO of Knowledge Bank said, “The year ended largely as it had started with a huge number of searches across the different product areas. During 2018 new lenders entered the market but it was product innovation that really was the stand out change. With interest rates remaining low, lenders continue to compete on criteria in addition to rate which makes it increasingly difficult for a broker to know who will or won’t accept their client. This product growth was coupled over the year with borrowers having increasingly complex property and financial circumstances. On average brokers searched on five individual pieces of criteria for each borrower which shows how essential it is for a system to ensure that cases are not sent to lenders who will inevitably turn them down.”

Linedata promises to transform the lending experience with Loansquare’s digital platform

Linedata (Euronext Paris: LIN) announces the acquisition of French start-up Loansquare, whose portal digitalizes relationships between borrowers and lenders. By acquiring Loansquare, Linedata enhances the end-to-end capabilities of its platforms and services for lenders.

“I am delighted to start 2019 with the acquisition of Loansquare, says Anvaraly Jiva, Founder and CEO of Linedata. We are engaged in an ambitious process of enabling digital transformation and are thrilled to be able to integrate innovators from the start-up community.”

The Loansquare platform is a comprehensive solution for setting up and managing commercial loans and streamlining exchanges between borrowers and financial institutions:

  • A Borrower Portal lets institutions expose their financing needs to lenders and manage their loan portfolio.
  • A Servicing Portal lets lenders manage financial flows and commitments in a fully automated and secure manner.

The platform also offers innovative diary, messaging and document management features.

“Companies are constantly searching for digital solutions to manage their operations simply and efficiently. The complementarities between the Linedata and Loansquare platforms enables us to satisfy this need in a truly innovative way, connecting banks and borrowers with the same user experience and standards demanded by consumers in their dealings with institutions”, adds François Lévy, Loansquare CEO.

Loansquare now interoperates with Linedata Uniloan360, a servicing platform for commercial and syndicated loans, Linedata Capitalstream, a global commercial loans origination and risk management platform, and Linedata Ekip360, a global leasing, car finance and consumer loans solution.

“The Loansquare platform enables us to deliver innovative solutions in all our markets, in North America, Europe, Latin America and Africa, that support our clients in the transformation of their business models”, states Alain Mattei, Head of Lending and Leasing Europe at Linedata.

John Griffith-Jones to chair StepChange Debt Charity

StepChange Debt Charity is today pleased to announce that John Griffith-Jones will chair the charity from 7 January, following the resignation of Sir Hector Sants last October on his appointment as the Chair of the new Single Financial Guidance Body. Chris Stern has been acting as interim Chair of StepChange Debt Charity for the past three months.

John Griffith-Jones was Chair of the Financial Conduct Authority from 2013 to 2018, and of its subsidiary, the Payment Systems Regulator. During this period the FCA took on responsibility for regulating consumer credit and carried out significant policy and supervisory interventions in this and related areas. Before this, he worked at KPMG from 1975 to 2012, becoming CEO and subsequently Chairman and Senior Partner of KPMG in the UK. He is Vice Chairman of the National Numeracy Trust, and also holds a number of other voluntary roles.

Chris Stern, interim Chair of StepChange Debt Charity, said: “We are delighted to welcome John to the role of Chair, and we know StepChange will benefit hugely from his wealth of experience and develop further under his guidance. His insight will be invaluable as we navigate the forthcoming period of growth in the debt advice sector generally, and the charity specifically, with our goal to double the number of people we help in four years.”

John Griffith-Jones said: “Debt advice has matured into a fully established sector within the wider financial landscape, with its own regulatory framework and its own challenges – notably the increasing demand for services. StepChange Debt Charity is well-placed to bring both scale and innovation to deliver the high quality advice that is so desperately needed both now and in the future. I am greatly looking forward to helping shape and develop the charity’s vital role, and thank Sir Hector Sants and Chris Stern for their excellent work, on which I now hope to build with the support of a strong Trustee and Executive team.”

New Single Financial Guidance Body (SFGB) gets down to work

A new body, the SFGB, is here to help people make the most of their money and pensions.

From 1 January 2019, the Single Financial Guidance Body (SFGB) brings under one new organisation the free services delivered by the Money Advice Service, The Pensions Advisory Service and Pension Wise.

The SFGB is an Arms-Length-Body, sponsored by the Department for Work and Pensions, with a joint commitment to ensuring that people have access and guidance to the information they need to make effective financial decisions over their lifetime.

The SFGB, working hand-in-hand with industry, will ensure that money and pensions guidance is available to those that need it, adapting to people’s changing needs throughout their lives, offering services and appointments over the telephone, online and in person where appropriate.

The SFGB will offer:

· Pensions guidance – providing information to the public on matters relating to workplace and personal pensions.

· Money guidance – providing information designed to enhance people’s understanding and knowledge of financial matters and day-to-day money management skills.

· Debt advice – providing people in England with information and advice on debt.

· Consumer protection – enabling the body to work with Government and the Financial Conduct Authority (FCA) in protecting consumers.

· Strategy – working with the financial services industry, devolved authorities and the public and voluntary sectors to develop a “National Strategy” across the UK to improve people’s financial capability, help them manage debt and provide financial education for children and young people.

SFGB Chair Sir Hector Sants, said: “Managing money is central to living a contented life. Throughout 2019 we will be talking to stakeholders throughout the UK to develop a national strategy for how we can work towards a society where everyone is able to make the most of their money and pensions.”

SFGB Chief Executive John Govett said: “I am delighted to be leading a new organisation that will offer easier access to the money and pensions information and guidance people need, throughout their lifetimes. As one organisation, we can deliver even more effective services and, through working in collaboration with our partners, can increase the scale and impact of everything we do. We will be listening to our key partners, stakeholders, staff and Government Departments and together build a new wider impact for our joint customers.”

StepChange comments on latest Bank of England figures

StepChange Debt Charity notes that latest Bank of England data shows that the annual growth rate of consumer credit slowed in November 2018, but credit card lending was still 7.9% higher than a year earlier, with other consumer credit lending up by 6.6%.

Commenting on the latest figures, StepChange Debt Charity CEO Phil Andrew observes: “Consumer credit growth may be relatively modest in percentage terms, but let’s not lose sight of the fact that in cash terms outstanding credit card borrowing still rose by £400 million compared with just a month earlier. In 2018, the Financial Conduct Authority announced a number of welcome measures designed to help address the unsustainable use of credit, including persistent credit card debt. The continuing growth in lending does suggest that vigilance will continue to be necessary to prevent credit becoming problem debt for households.”

Christmas hangover as Brits feel the financial pressure

As the hangovers of Christmas excesses hit, over one fifth of Brits (22%) say they feel most financially under pressure in January, according to research from TDX Group, an Equifax company.

Of all the months in the year, January is the most financially difficult, with 26% of females flagging it as a pressure point, compared to 18% of males. The build up to the big day is also a strain, with 19% of Brits citing December as when they worry most about their personal finances.

Credit cards are the type of debt people are most concerned about (cited by 20% of respondents), followed by utility bills (11%) and mortgage repayments (9%).The survey, conducted online with Opinium, also revealed that over a fifth of respondents (21%) would find any amount of personal debt unmanageable. The average amount of debt people consider to be unmanageable is £8,854, almost a third (30%) of the average UK salary. Men feel more comfortable with a higher level of borrowings, on average stating £9,996 as manageable compared to £7,661 for women. People in the South East believe they can handle the largest amount of personal debt at £10,662.

Meanwhile, almost three in ten people (29%) highlighted that a mortgage of any size would be unmanageable. This was most common in Wales (38%), compared to just 22% in Yorkshire and Humberside.

Richard Haymes, Head of Financial Difficulties at TDX Group, an Equifax company, said: “Year after year, spending pressures over the seasonal period push many to exceed their financial limits. Record high levels of personal debt in 2018, combined with so many people saying they find debt unmanageable, make this particularly concerning.

“Nonetheless, positive trends are developing. The increasing regulatory focus on expanding awareness and access to debt advice, such as the government consultations on Statutory Debt Repayment Plans and breathing space for people in debt, should help break down the social stigma around financial difficulties and enable more people to access the help they need. This will play a key role in addressing society’s debt problems in the year ahead.”

iwoca adds Barclays and HSBC to Open Banking connections

iwoca, the UK’s fastest growing small business lender, today announces it has connected to Barclays and HSBC banks under Open Banking. This expands the number of Open Banking connections offered by iwoca to three, including Lloyds Bank, and will enable more than 60 percent of the lender’s customers to take advantage of the Open Banking service.

Open Banking is the new regulation which allows customers to give verified third-parties access to their bank data via a secure application programming interface (API). Business owners who bank with either Barclays, HSBC or Lloyds can now provide up to five years of transaction history in seconds when applying for a revolving credit facility or long-term loan from iwoca. According to the Competition & Markets Authority (CMA), these three banks combined accounted for between 50 and 80 percent of the market share of UK business current accounts in 2015[1], the last year for which figures are available.

However, a survey of 1,000 small business owners, carried out in November on behalf of iwoca, found that almost three quarters (73 percent) could not correctly identify what Open Banking is. A lack of public awareness of Open Banking has been identified as an issue in the past but as the initiative approaches its first anniversary, awareness remains persistently low.

iwoca became the first business lender to connect with any of the UK’s nine largest high street banks through Open Banking when the fintech company announced a full connection to Lloyds Bank in November. A beauty salon in Kent was the first ever small business to apply for a loan in the UK using Open Banking to provide iwoca with a transaction history during the application process. iwoca made funds available to the salon in just one hour and 23 minutes.

Following this announcement, iwoca will continue to work on finalising connections with the remaining six high street banks. Connections to Santander and NatWest are close to being completed. iwoca has been working closely with all nine of the banks since the initiative’s launch in January 2018.

Mark Chidley, Independent SME representative to the Open Banking Implementation Entity (OBIE) said: “iwoca’s announcement today demonstrates that the potential of Open Banking to transform how small businesses manage their finances is being realised. This is very good news for the UK’s small businesses who, according to recent Government figures, employ over 16 million people and have a combined turnover of over £2 trillion.

“Open Banking has a powerful role to play in bringing together members of its ecosystem to provide small businesses with the ability to manage their businesses in a more productive, efficient and profitable way – helping to mitigate persistent challenges such as late payments, low productivity and inefficient access to credit. The OBIE looks forward to continuing to bring the many actors in the ecosystem together in order to fully explore and realise the benefits that open banking can bring to small business owners and UK plc.”

Christoph Rieche, CEO and co-founder of iwoca commented: “Our Open Banking team has been hard at work to add Barclays and HSBC to our first connection with Lloyds and I’m delighted that we can now offer almost two-thirds of our customers an easier way to get approved with us. Clearly there’s a need to raise awareness of Open Banking and help small business owners benefit from it, and we’d love to work with the banks and the Open Banking body to achieve that.

“We believe that what we do at iwoca is helping a vital sector of the country thrive. Business owners want to get on and do what they do best – running their own business. That’s why we want to make getting a small business loan from iwoca as simple as booking a plane ticket online. Open Banking is helping us to achieve that.”

Brits live in the red for this long

A shocking number of UK adults would leave it up to three years or more before seeking professional help if they were in debt, new research has revealed.

A survey of 1,000 UK adults, carried out by Creditfix, the UK’s largest personal insolvency practice, found that 59% of Brits would wait over two years before asking for help, while almost half (48%) would wait for more than three years before reaching out for professional advice.

An overwhelming number of Brits (72%) said they would be uncomfortable discussing debt with a stranger, making it difficult to seek out professional help if they found themselves in that situation.

Almost 1 in 3 (31%) said they would be too embarrassed to talk to anyone at all about their financial problems, including friends and family.

According to the data, those aged 18-34 proved far more uncomfortable discussing debt, what they earn, and how they spend their money than those age 35 and over.

Women are least likely to discuss money woes with a professional (79%), in contrast to 65% of men.

58% claimed that if they were in debt they would try to pay off the money themselves so wouldn’t need to involve their loved ones or seek professional help.

Taylor Flynn, marketing manager at Creditfix comments: “The research just shows how common it is for Britons to be reluctant to seek help with debt. There are various reasons for this – a worrying number of believe they can handle the debt themselves, while many are too embarrassed to discuss their debt.

“What people might not realis, is that debt issues can be solved by seeking help and advice at the earliest opportunity, and can prevent embarrassment or further stress. By taking control of debt and creating a plan to tackle the problem, it will make it easier for those in financial difficulty to discuss it with their friends and family.”

Residents in costal city Hull are will leave it the longest before getting professional help, followed by Liverpool locals.

Shoppers looking for fixed-term deals remains strong in December

Interest in fixed-term mortgages has remained strong in December, new analysis from Experian reveals.

Today, the BofE announced it had voted to leave Base Rate at 0.75% – its highest level since 2009 – after it was raised by a quarter of a percentage point in August.

Analysis of data from Experian Marketplace shows 89%* of mortgage shoppers in December are looking at fixed-term deals, up from 85% in November and 83% in October.

In comparison, interest in tracker mortgages is flat, accounting for just 6% of searches in the three months.

The findings suggest that the increase in the cost of borrowing in August has discouraged potential homeowners from considering tracker mortgages as an attractive option for their home loan.

Amir Goshtai, Managing Director of Experian Marketplace and Affinity, said: “Interest in fixed-term deals shows no signs of slowing down as consumers look to protect themselves from future rate rises, while growing uncertainty about the economy could also be playing a part.

“It’s understandable that fixing is proving to be popular, as potential homeowners enjoy the security of knowing what their monthly payments are, but it’s important they consider all their options when it comes to their mortgage.”

Previous analysis from Experian found mortgage holders could find themselves overpaying by £1,800 a year if they fail to switch deals when their introductory rate finishes and they slip onto their lenders’ Standard Variable Rate (SVR).

Based on the average mortgage amount taken out by Experian customers in October of £151,955 with a typical SVR of 4.39% over a 25-year term, the monthly payment is £822.41 a month.

But with customers being offered an average initial rate of 2.38% in October, they would be repaying £672.55 a month – a difference of £149.86 monthly and £1,798.32 annually.

Potential homebuyers can check their mortgage eligibility with Experian, giving them the opportunity to find out which mortgages they are likely to be accepted for and how much they could borrow, based on lenders’ criteria.