Credit Connect’s hosted its first-ever Online Lending Technology Think Tank last week which saw lending strategies and the future of the sector discussed by thirteen leading professionals from a variety of lending sectors.

The themes of fraud, open banking, credit risk and the future of lending were discussed by panellists and Chair Chris Warburton from RO Strategy The insights from the event were recorded and now can be viewed by clicking on this link.

Nearly two hundred lending professionals from banks, credit card providers building societies, loan providers, credit unions and fintechs were amongst the viewers across the four sessions.

Commenting on the event host Colin White Founding Director at Credit Connect said “It was great to see such a great mix of lending professional take part in the industry panel discussions supported by the viewer interactions responding to the survey polls and asking questions at our first-ever lending focused event.”

“We have had some great feedback from the attendees and fully intend to run this event every six months moving forward and also bring this alive further with a face to face networking version of the event when possible. We have already approached speakers the next instalment of the Think Tank series which will be screened in October.”

Event panel speaker Eleimon Gonis, Senior Risk Manager – Stress Testing & Modelling Methodology Oversight at Nationwide Building Society said “I thoroughly enjoyed the discussion and questions. It’s forum’s like these that enable practitioners to come together and share not only best practice, but thoughts and ideas on topical issues they are facing, celebrate successes and perhaps, more importantly, share their views on what is on the horizon for their industry.”

Event sponsor Stephen Ashworth, CEO at AperiData said “AperiData are proud to have sponsored the inaugural Lending Think Tank.  The well thought out agenda and varied mix of contributors combined to give fascinating insights into current challenges and strategic thinking across the industry.  We believe events such as this provide a valuable forum and look forward to supporting the next one.”

Event Chair Chris Warburton shared his Top 10 insights takeaways from the event:

1. The pandemic, will inform future product design thinking and processes going forward
2. Data critical, however skilled knowledge to know what to do too. Invest in this now.
3. Technology investment high the last 12 months, however reactive. Expect a slight hiatus, but a more fundamental upgrade of tech capability is underway
4. Customer characteristics are changing, it will likely flow to lending. We are entering a more polarised world for affordability, one we need to now understand
5. Likely to be new lending opportunities from new segments once the new environment stabilizes
6. Credit Risk Models impacted, ML an opportunity, balanced with explainability
7. Open Banking; good uptake, but this varies by sector. Making life easier key for adoption
8. Open banking is just the starting. Once normalized there are more opportunities (FCA paper and pot 90d rule change)
9. Digital identity is in development, may help fraud, but we also need to think about inclusion
10. Transparency, bias and ethics are all going to be important. We are using more data and developing more complex models

The next Online Collections Technology Think Tank will take place on Thursday 21st October.

If you are interested in speaking or becoming a sponsor for the next event then call 01622 437014 or email for more information. More online events will be confirmed soon.

Event Questions round-up

Responses to questions:

  • Do you think the open banking insights can improve the time-to-decision in the credit risk assessments?

Stephen Brown, Scottish Building Society: “Open banking will undoubtedly speed up the time-to-decision when it comes to credit risk assessments.  We should consider that open banking will only form one aspect of how we weigh risk and this must be combined with broader bureau data and customer-specific insights around employment, employment tenure and for self-employed applicants potential trading and sector risks.”

“A truly well-rounded picture of a customer’s situation needs to factor in each of the aforementioned planks and ideally a system can make a quick and ideally real-time decision or a human underwriter can, ideally on a dashboard, come to the appropriate conclusion.”

I think the larger question regarding open banking is have we truly adopted and embraced this aspect of technology at a societal level and the answer to that question, for now, is no.”

Michael Hoare, RateSetter: On the question of Open Banking and the time-to-decision, I would say that in certain circumstances this is definitely true.  For the easiest use-case, income verification, Open Banking represents an opportunity to automate versus the manual bank statement/payslip request.  For that particular niche, this will definitely automate a process that is manual today.  The problem is that it is a niche use case.  To really move the needle on speed of decision, Open Banking needs to be much more ubiquitous, both in terms of consumer adoption, but also in the underwriting journey.  It needs to be embedded in creditworthiness, affordability… elements.

Also, there is a danger that it provides more opportunities to decline or refer.  In the Credit risk analytics teams in every lender, they need to resist the temptation just to use the additional data to find reasons to refer to an underwriter or ask for more information.

  • We source our mortgages via intermediaries. Most Open Banking providers we have seen are set up when the business engages directly with the applicant, and therefore have been deemed unfit for purpose where we have an intermediary sat in the middle. How can firms adapt their customer journeys to account for this?

Freddy Kelly, Credit Kudos: “We work closely with brokers and other intermediaries, providing them with Open Banking insights and reports to help them easily understand a borrower’s situation, but in order to maximise the full potential of Open Banking this information must be able to be communicated to lenders also.”

“Our Reports Sharing function also means that lenders can incorporate the data from the intermediary they are working with, and it also means intermediaries can people with the lender best suited to their specific requirements.”

  • What’s the best way to get consumers to trust Open Banking? 

Freddy Kelly, Credit Kudos: “There are clear signs that consumer trust and confidence in Open Banking is growing. The number of Open Banking users in the UK passed three million earlier this year and PwC has predicted that the number will rise up to 32.7 million by 2022.”

“To ensure this trend continues, Open Banking providers must work hard to educate consumers on the real benefits of solutions. If people understand the value of their data and the tangible benefits that sharing it can bring to their day to day lives, they will be more likely to use it. If providers don’t explain how this process works clearly, demonstrating a genuine value exchange, then we will miss the chance to maximise the opportunity.”

  • Would you suggest there is a strategy a lender can use to get people to opt into using Open Banking? 

Eleanor Demuth, Curve Credit: I cannot see that there is a specific ‘strategy’ to use but if people are better informed about the benefits of opting in i.e. less paperwork, accurate assessment across multiple accounts, the fact that it is securely processed etc in terms of reassurance that will work.”

Freddy Kelly, Credit Kudos: “Lenders need to highlight the value that Open Banking brings for a borrower to help encourage them to use it during the application process. Whether that is explaining they can save time and effort thanks to there being no need to upload documents, or that they will not only benefit from quicker decisions but they’ll receive access to more personalised financial products.”

“It’s also vital that regulation in the UK continues to be proactive and anticipates the changing needs within the Open Banking space. It’s been proposed, for example, that regulation will remove the 90-day authorisation, which would be a positive move for consumers that are not currently getting full value out of Open Banking-enabled personal financial management solutions.”

Selected Event Poll Results

What type of technology will drive lending behaviour in the next 5 years?

  • Artificial Intelligence 29%
  • Machine Learning 19%
  • Open Banking 49%
  • Something else 3%

Data sources such as Open Banking create opportunities to better assess risk for underserved segments. Which of the following apply to your organisation?

  • Vulnerable customers 43%
  • SMEs 19%
  • Near Prime Customers 38%
  • Gig workers 0%

Where in the customer/risk lifecycle do you see Open Banking having the most impact currently?

  • New lending 44%
  • Customer management 15%
  • On-going risk 26%
  • Collections 13%
  • Other 2%

Do your think your business has sufficient technology to deal with the threat of fraud?

  • Yes 15%
  • No 14%
  • Unsure 71%

*More poll results are available on request