Credit affordability decisioning tool launches

22nd March 2023

A new credit decisioning tool, Fuse by Pave, has launched which claims it can offer lenders 97% accuracy in affordability tests, clearer insights into consumer affordability, reduced rate of defaulted loans, and improvements to borrower outcomes.

In addition to improved accuracy in affordability testing, which uses Open Banking technology it also offers lenders personalised insights into cashflow and credit risk of prospective borrowers. The AI-powered technology enables lenders from across the financial ecosystem to increase their credit prediction power by 22 percentage points and reduce loss rates by 30% without reducing approval rates. The company estimates that its adoption in lending models could improve margins by around 7%.

It is estimated that there are 12-15 million near-prime borrowers in the UK who are excluded from affordable borrowing. The company says that by using insights generated through Open Banking, the new product provides lenders with a richer understanding of an applicant’s current financial situation and whether the credit product they are applying for is affordable for them.

Fuse is the latest product from credit builder app Pave. Since launch, Pave has analysed more than 150,000 lending decisions, 1.5 million consumer credit reports, and over 400 million Open Banking transactions. Pave seeks to bring more financial equality to millions across the UK. As a fully regulated credit builder, receiving nearly half a million downloads to date, Pave utilises Open Banking transactions to help consumers build better access to credit.

Sho Sugihara, CEO and Co-Founder of Fuse by Pave said “Given the increasing reliance on credit, lenders require a tool that offers improved affordability insights not only to meet commercial goals but also enhances outcomes for borrowers. Fuse provides a solution to this demand, by providing market-leading clarity over lending decisions.”

“The data insights that Fuse offers customers enables them to build lending models that have consumers at the heart, reducing the number of defaulted loans, and ultimately protecting consumers.  Transforming the financial system is vital to improve financial equality across the UK and eventually beyond – but lenders need regulatory and financial expertise to support them during this shift. Fuse can play a central role in providing lenders with the tools they need to remove barriers to improve lending decisions, provide more personalised product and boost equality across the credit sector.”