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Recent News & Events At LendingMetrics

Loans 2 Go Choose LendingMetrics to launch Online Lending
02/08/2017

Loans 2 Go have been at the forefront of Log Book loan lending since 2002 and continue to set the pace with a loan product that is fast, simple and convenient for their customers. With over 60 branches UK wide they have now launched an unsecured lending product in store and online, their aim was to continue to provide a personal experience whilst maintaining their company ethos to grow the company’s foothold in the unsecured market. They pride themselves on their number one priority, being able to treat all customers fairly whilst providing flexible loans including debt consolidation and top up loans. Their corporate ethos is to be transparent and to make sure their customers are treated fairly at all times and given the opportunity to benefit from the financial independence they seek.
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Origin
Since 2011 LendingMetrics a credit reference agency authorised by the FCA has been a leading provider of unique real-time data to alternative lenders to assist with the prevention of fraud and to assist with live credit risk decisions via their real-time data products TrueTime. In partnership with Equifax, LendingMetrics can also simultaneously deliver credit, bank, income verification and anti-money laundering checks. They also provide the ground breaking, some say “game changing” product, Bank Vision, combining 90 days of real-time granular applicant bank account data with unrivalled industry knowledge and analysis to deliver the most powerful affordability and anti-fraud product available.

Following 3 years R&D the company introduced ADP (Auto Decisioning Platform) in 2016 revolutionising the opportunity for the financial services sector to quickly deliver increased volume with reduced overhead using automated lending decisions. ADP utilises its proprietary data products alongside integration with all major CRA’s plus many other 3rd parties. ADP is a powerful decision engine builder that puts the lender in control of credit rule changes and allows operational/credit risk staff to control changes in real time through a simple user interface.

Approach
Loans 2 Go, appointed LendingMetrics to support the launch of their online lending platform, offering automated flexible loans to suit the consumers’ needs.

Loans 2 Go chose to use LendingMetrics’ product BankVision which enables consumers to share their financial information, such as income and expenditure in real-time via a bank level secure portal. BankVision removes resource intensive and costly processes from the lender’s operation, reduces delays in the application process and minimises the risk of fraud by removing the reliance on paper documentation.

LendingMetrics has also delivered to Loans 2 Go, Equifax's credit insight, bank verification, affordability and anti-money laundering suite of products. These data services complement BankVision by providing lenders with a complete solution for assessing the credit risk of an applicant.

As part of their approach LendingMetrics, provided credit risk advice to assist Loans 2 Go in producing their decision engine and assisted the team so that their understanding of the consumer data grew throughout. LendingMetrics attending regular meetings both prior to and during the implementation phase in order to assist Loans 2 Go and to share their industry experience.

LendingMetrics assisted with designing a multi-functional decision engine to cover all areas of credit risk including a multi bureau approach. Utilising scorecards alongside an automated rule set over various data components they built an affordability check including an offer and loan term matrix, providing automated flexibility built into the loan offer, based on the consumer’s individual circumstances.

The LendingMertics ADP implementation team then took the lead, headed by a client dedicated Project Manager, held several scoping and requirements gathering calls to provide a full project plan with timelines. Once all requirements were gathered LendingMetrics took 4 weeks to complete the build of the decision engine and complete the additional third party integrations required by Loans 2 Go. During the implementation of the ADP, regular calls took place with lead developers on both sides so that the ADP project ran smoothly.

Results
LendingMetrics have delivered a service which produced a scalable model and Loans 2 Go have now successfully launched online and are looking to increase their lending portfolio using the ADP platform and associated services. The solution was delivered within budget and on time, due entirely as a result of the collaborative and knowledgeable teams at Loans 2 Go and LendingMetrics. Following training, the Loans 2 Go team are now using the ADP interface to change their credit decisions in real time, champion challenge their rules and analyse the results within ADP, as well as using the Equifax suite of products and BankVision.

Summary
The combination of highly automated decisioning and long industry experience delivered a scalable solution. The client has successfully migrated to ADP with minimal business disruption and is enjoying the benefits of being in control of managing their credit risk decisions in real time. The companies work well as a team, growing their combined knowledge and are looking forward to cementing the relationship with further projects.

Credit-Connect publish article for ADP Case Study
31/07/2017

An article has been published by Credit-Connect focusing on the Street UK ADP case study.
You can read the full article here http://www.credit-connect.co.uk/consumer-news/case-study-feature-street-uk-launches-automated-decision-engine

Street UK appoints LendingMetrics for their automated decisioning launch
18/07/2017

Since 2002 as an online and branch lender Street UK ‘The Affordable Finance Company’ has provided affordable finance for everyday living and pride themselves on being an ethical loans company. At an APR of 201% (equivalent to 0.22% per day, FCA Price Cap is 0.8% per day) and with lower interest rates available for subsequent borrowing, their flexible short-term loans of £100 to £500 varying from 3 to 6 months are a cheaper alternative to people underserved by traditional lenders. As a Social Enterprise operating a not-for-dividend organisation, Street invests all its profit back into the business. They aim to provide an affordable range of financial products and services to individuals that have difficulty in obtaining these from mainstream institutions such as Banks and Building Societies. Their products are designed around the consumer to ensure they offer a competitive alternative to using HCSTC doorstep/online lenders, pawnbrokers and expensive alternatives. If they are unable to provide credit they will explain why and provide the consumer with budgeting advice and support.
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Origin
Since 2011 LendingMetrics a credit reference agency authorised by the FCA has been a leading provider of unique real-time data to alternative lenders to assist with the prevention of fraud and to enhance live credit risk decisions via their real-time data product TrueTime. In partnership with Equifax, LendingMetrics can also simultaneously deliver credit, bank, income verification and anti-money laundering checks. They also provide the ground-breaking, some say “game changing” product, Bank Vision, combining 90 days of real-time granular applicant bank account data with unrivalled industry knowledge and categorisation analysis to deliver the most powerful affordability and anti-fraud product available.

In 2016 following 3 years R&D the company introduced ADP (Auto Decisioning Platform) revolutionising the opportunity for the financial services sector to quickly deliver increased volume with reduced overhead using automated lending decisions. ADP utilises proprietary data solutions alongside integration with all major CRA’s plus many other 3rd parties. ADP is a powerful decision engine builder that puts the lender in control of credit rule changes and allows operational/credit risk staff to control changes in real time through a simple user interface.

Approach
LendingMetrics were appointed by Street UK to support the re-launch and growth of their online lending operation, offering affordable personal loans with a clear transparent model.

As part of their approach LendingMetrics provided credit risk advice to assist Street UK in producing their decision engine. In order to maximise the effectiveness of credit data it was combined with credit risk and analytical expertise. LendingMetrics assigned a dedicated team of experienced analysts, familiar with all aspects of automated decisioning and versed in multi bureau data sources to assist Street in developing their credit risk model. When doing so all parties paid particular attention to the regulator’s requirements that credit providers should constantly improve their assessment of the borrower’s ability to repay debt and thereby prevent over indebtedness. LendingMetrics believes that positive engagement with such regulation aids better credit performance and thereby commercial success.

LendingMetrics designed a multi-functional decision engine to cover all areas of credit risk (fraud prevention, affordability and suitability). Proprietary scorecards were utilised alongside an automated rule set over various data sources to build an affordability check and this was combined with a number of credit and anti-fraud / ID checks to mitigate the need for manual checks and excessive documentation, allowing customers a smoother journey. The LendingMetrics implementation team then took the lead, headed by a client dedicated Project Manager. They held several scoping and requirements gathering calls to provide a full project plan with timelines. Once all requirements were gathered LendingMetrics took 4 weeks to complete the build of the decision engine and pass it to Street for UAT. During the implementation phase, regular calls took place with lead developers on both sides so that the integration into ADP was seamless and straightforward.

Results
Street UK successfully launched, have enjoyed solid performance and growth and most importantly their decisioning model is now highly scalable. The ADP solution was delivered within budget and on time. Both parties worked to achieve a seamless delivery and LendingMetrics enjoyed working with Street’s knowledgeable team. Following ADP training the Street UK team are now using the ADP interface to autonomously manage their credit decisions in real time, champion/challenge their rules and analyse results in order to inform future rule changes.

Summary
The combination of highly automated decisioning and long industry experience delivered a scalable solution. The client has successfully migrated to ADP with minimal business disruption and is enjoying the benefits of being in control of their credit risk decisions in real time.

Neil Williams, Managing Director of LendingMetrics, said: “This appointment reflects our growing foothold within the non-banking finance sector and we are excited about the growing requirement for ADP within many spheres of lending.”

Stephen Mazurek, Operations Manager at Street UK, said: “LendingMetrics have not only delivered a great tool but have also provided a valuable credit risk consultative service by sharing their extensive industry knowledge. ADP solves a multitude of problems and unlike competitor products does not have a high price tag. There was no capital investment required, just an affordable monthly support fee.”

LendingMetrics Joins FDATA
19/09/2016

LendingMetrics the real-time credit reference agency and supplier of live bank transaction data, has joined FDATA.
The Financial Data and Technology Association (FDATA) represents the fintech community in the move towards an open banking API.

FDATA's members provide innovative financial applications and services to empower customers to make better decisions and take fuller control of their financial lives across all their accounts, credit cards, loans and investments.
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Commenting, FDATA's Executive Director Andy Maciver said:
"We're delighted to welcome LendingMetrics into our membership, and it's great to be able to learn from the ideas and insight of another fintech startup. This is a vital time for the industry as we move towards the open API, and at FDATA we are acting on behalf of third party providers to ensure an implementation which allows our members to serve their customers in the fullest possible way."

Neil Williams, LendingMetrics' Managing Director, said:
"Over the past five years we have been a leading voice for the evolution of real-time credit and open banking data. Now that consumers can expect better access to their financial data, we are looking forward to further innovating the ways in which they can leverage it. The shared expertise within the FDATA membership will be invaluable in helping to shape our plans and we are delighted to have been accepted. It has been an exciting few weeks for us, following our recent announcement that we have become the first UK credit reference agency to secure full authorisation from the FCA”.

LendingMetrics become the first mainstream CRA to receive full authorisation from the Financial Conduct Authority
12/09/2016

LendingMetrics have this week become the first CRA to secure full authorisation from the Financial Conduct Authority.

The company is extremely proud of the effort and hard work its compliance team have put into securing authorisation This milestone offers us the certainty we need in order to move forward with our exciting expansion plans, new product offerings and diversification into additional market sectors.
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Neil Williams, Managing Director of LendingMetrics commented "We are delighted to be the first mainstream credit referencing agency to be fully authorised. The lengthy process ultimately resulted in a successful outcome and I put this down to our diligent approach to compliance and to the hard work and determination of our excellent team. We now look forward building upon our recent growth, working with our existing partners and clients and bringing more innovation to the credit data market."

This authorisation is also great news for the future of BankVision. This product was included in the discussions and submission to the FCA and was part of the application process. This fact, along with the news of several BankVision customers also receiving full authorisation from the FCA, shows how credit risk is evolving and how compliant innovation is driving improvements in online lending.

BankVision is a revolutionary product which allows consumers to provide read-only and secure access to their bank accounts within seconds. This speedy and intuitive on-boarding process works to minimise application abandonment and enable a seamless user experience. This in turn increases consumer loyalty and strengthens relationships. There are various solutions currently available which can offer this process to access statement data, but none currently via an FCA authorised firm.

LendingMetrics, pioneers in the field of real-time credit data, also now intend to to build upon the success of TrueTime achieved with guarantor lenders, HCSTC lenders and retail credit providers, by pushing for absolute market coverage in these, and other key areas. When this is achieved, real-time credit fraud will be a step closer to eradication.

Bank Statements! The New Era of Credit Referencing?
05/07/2016

Newly authorised lenders are embracing electronic Bank Statements and it could give them the edge!

  • 1. Confirm affordability
  • 2. Responsible Lending....oh! and
  • 3. Affordability

During the investigation of the HCSTC industry the FCA outlined that one of its major aims was to ensure that affordability assessments would be based upon accurate and up to date information.
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The FCA handbook, CONC 5.3 Conduct of business in relation to creditworthiness and affordability states:
“The creditworthiness assessment and the assessment required by CONC 5.2.2R (1) should include the firm taking reasonable steps to assess the customer's ability to meet repayments under a regulated credit agreement in a sustainable manner without the customer incurring financial difficulties or experiencing significant adverse consequences.”

In other words, it would no longer be acceptable to simply ask the client to declare that they could afford the loan, instead the lender must obtain evidence to support affordability.

But whilst there are a myriad of good affordability tools out there to choose from, none seem to offer a perfect solution to the major challenge faced by lenders, “Are my affordability checks robust enough to satisfy an FCA audit and ensure I am lending responsibly?”

Alternatively, asking customers to provide paper or scanned documents is of course an option, but for the vast majority of lenders the world has moved on. In most cases it’s not commercially viable to slow things down by asking for manual documentation which can be a resource intensive and costly process, especially when competing against fully automated lenders who are funding within minutes.

Are Bank Statements the ultimate affordability check?

Systems are currently in ever wider use which deliver bank statement data to a lender in near real-time when authorised by the customer. The methods are many and varied, some ask the borrower to download an app or the lender to log into a portal to send manual agent driven requests. Others, like BankVision for example offer a fully automated route allowing the customer journey to be un-interrupted via a standalone or API option.

No delay, no fuss and no doubt providing lenders with pretty much everything they need to know to make a lending decision!!

Commonly the current solutions provide around 90 days+ of real-time banking transaction data for almost every consumer in the UK helping lenders to make critical decisions on loan applications. Reviewing an applicant’s bank statement provides lenders with a reliable source of checking the affordability of the application. The assessment means the lender can adjust the loan to suit the applicant’s situation.

Seeing unadulterated bank statements containing salary credits, loan credits and debits with other general expenditure, along with a review of the customer’s credit file, surely is a bullet-proof way to properly assess affordability?

The bank statement data can even help to identify customers with worryingly high levels of gambling losses, surely a red flag to any responsible lender?

Better than Real Paper Bank Statements?

  • Eradicates the risk of fraudulent bank statements
  • A most powerful affordability check and accurate income verification
  • Identification tool reducing online lending fraud
  • Instant & accurate identity and bank account verification
  • Match the customer debit card to the bank account
  • Review of overdraft limits and breaches, pay dates, benefits, Direct Debit and standing orders

There are many challenges to lending in todays market, and real-time bank data addresses many of them.

The best solutions, of permission-based access to bank accounts and transaction information, offer added degrees of categorisation of the data which aids automated decisioning and it is imperative, given the sensitivity of the data that banking level encryption and security are at their core.

Lender’s fundamentally want to grant loans, after all that’s why they are in business. These ground breaking products will eliminate the need to turn away customers with thin CRA files, or customers who do not have the correct documentation or do not pass the first affordability checks. Consumers benefit by increasing their access to credit and lenders benefit by being able to make informed credit risk decisions automatically without the need for staff to review paper documents manually.

Now that the FCA has jurisdiction over all credit sectors it is clear to see why more of them are using automated statement data. Log book loans companies, peer to peer lenders and most recently the mortgage market are all turning to this emerging technology. New MMR (Mortgage Market Review) rules that came into force on the 1st of June mean that to underwrite a mortgage correctly it will be essential to gain access to clean and recent 90-day bank statement data. Which will see banks and building societies going through bank statements with a fine-tooth comb, aimed at ensuring borrowers are not offered loans they cannot afford.

Nicole Blackmore from the Telegraph stated: “The City regulator, the Financial Conduct Authority (FCA), has introduced the new rules, known as the Mortgage Market Review, to ensure borrowers are issued with mortgages they can afford both now and in the future. The FCA was concerned that lenders were making it too easy to get a mortgage before the financial crisis. Many households borrowed too much money and found they were unable to keep up their repayments when the financial crisis struck.”

What does the Future hold for electronic Bank Statements?

With certain products like BankVision consumers can provide read-only and secure access to their bank accounts within seconds. This speedy and intuitive on-boarding process works to minimise abandonment and enable a seamless user experience, increasing consumer loyalty and strengthening relationships. There are various solutions currently available which can offer this process to access statement data, however there are challenges.

  • The first major challenge is to ensure the process is simple for the consumer and works well on a range of devices from desktops, to tablets and mobiles. The ideal approach is to ensure there is no disruption or disconnect in the consumer journey, with different approaches being taken by different providers where downloaded apps and portals are required.
  • Another significant challenge is the method of “screen-scraping” in the background to access and retrieve the statement. This process must ensure it closely reflects the changing methods used by each bank and quickly detects issues when banks change their process.
  • There remains a small but persistent confidence issue from the consumer, for those who are naturally wary of entering their banking security details online. Similar to the event of entering credit and debit card details for online payments or applications from the 2000’s, most commentators take the view that this hesitation will gradually drop away, though will always be a factor. Therefore it is important that the consumer is given the correct journey and confidence that the process is appropriate and secure.

However, these challenges are expected to be largely resolved when the banks launch the much anticipated API process under the Open Banking Project, due to be made available in early 2017. This Open Banking method will allow vetted and authorised providers to make the consumer journey even more efficient, and will be directly supported and approved by the banks themselves using a verification process similar to 3D-Secure.

The OWBG recently convened at the request of HM Treasury to explore the benefits of open data to customers and financial institutions alike. The OWBG have recommended that an Open Banking Standard is formed to help drive both competition and innovation in the financial services sector. The OWBG have formed the framework for the Open Banking Standard by consulting with industry experts from Fintech, data and banking communities and have committed to ensuring that the Open Standard is “Developed and maintained collaboratively and transparently, and can be accessed by anyone to use”.

Quote from the Economic Secretary to the Treasury, Harriett Baldwin MP

“A key part of the government’s economic plan is to improve competition in the banking sector so that it better serves the needs of Britain’s businesses and consumers."

“That is why at Budget we committed to delivering an open API standard in UK banking, which will help to drive more competition and innovation in banking for the benefit of consumers. To take forward this important work, we established a Working Group comprising a diverse range of stakeholders across government and the banking and FinTech industries."

“It is great to see today the first publication of the Open Banking Working Group, providing an overview of the benefits their work will bring and setting out formally how they will deliver against the government’s commitment. This is an important milestone in the journey towards a better, more open banking sector that works more effectively for consumers. It is a great example of how the UK’s financial services and FinTech industries are collaborating with one another to take world-leading action in banking.”

The major credit referencing companies will look to use statement data in conjunction with traditional CRA data, adding depth and velocity to their scores and current data. The regulatory environment for all spheres of lending continues to evolve and we think it’s vital that lenders have access to real-time data to make better lending decisioning, especially on affordability and expenditure. My suggestion…. Be an early adopter and don’t be left behind!

LendingMetrics Help Places For People To Deliver Comprehensive Affordability Checks
21/06/2016

LendingMetrics, the real-time data expert, continues to strengthen its position in the alternative lending markets having been selected by Places for People Financial Services to provide its entire suite of credit referencing products for their lending division.
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Part of the award-winning property and leisure management, development and regeneration company, Places for People Financial Services offers unsecured personal loans and certain types of secured lending. It also recently received authorisation from the Financial Conduct Authority for its consumer credit permissions.

Places for People Financial Services has chosen to use LendingMetrics’ product BankVision which enables consumers to share their financial information, such as income and expenditure in real-time via a bank level secure portal. BankVision removes resource intensive and costly processes from the lender’s operation, reduces delays in the application process and minimises the risk of fraud by removing the reliance on paper documentation.

Victoria Drummond the Operations Manager at Places for People Financial Services, commented: “Places for People aims to provide fairer financial services to borrowers, by providing flexible and affordable loans. It was important for us to find a credible partner and the LendingMetrics product suite and pricing model was the correct fit for our lending model, covering all aspects of credit risk. As a smaller company than traditional CRAs Lending Metrics’ adaptable approach, market expertise and quick integration times assisted with our new automated decisioning launch.”

LendingMetrics has also delivered to Places for People, Equifax's credit history, bank verification, affordability and anti-money laundering suite of products. These data services complement BankVision and TrueTime® by providing lenders with a complete solution for assessing the credit risk of an applicant.

The LendingMetrics TrueTime® database which also supplies the Equifax Real-Time Exchange directly addresses the FCA's position on real-time data sharing and affordability checks. A true real-time data sharing platform for credit providers to report Lead, Application and Loan information, making it a comprehensive solution for the online world.

David Wylie, Director of LendingMetrics, commented: “We aim to deliver a whole suite of products with greater predictive capability by providing real-time insights. The regulatory environment for alternative lending continues to evolve and we think it’s vital that lenders have access to real-time data to make better lending decisions, especially on affordability and expenditure.”

Please view the article on the CreditMan website here

Electronic Bank Statement in action at the Credit Today Conference
23/03/2016

LendingMetrics are pleased to announce that we will be exhibiting at the Credit Today Conference in April and will be showcasing two of our most exciting and groundbreaking products, BankVison and TrueTime.
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BankVision, in particular, is delivering invaluable bank account information and is proving to be hugely popular with credit providers. It is in very high demand across the lending sector with several major new clients on-boarding in quick succession. Our proprietary concept combines real-time granular bank account data with unrivalled industry knowledge and analysis to deliver the most powerful affordability and anti-fraud product available in the marketplace today.

  • The future of on-line lending decisions
  • The most up to date intelligence available
  • Giving lenders the decisioning edge with access to actual income and expenditure information

The service provides proof of identity, multiple account verification, current bank account balances and up to 90-days of bank transactions.


Bank Vision’s revolutionary Instant Account Verification service helps credit providers to make critical loan decisions quickly and accurately, increasing the speed of processing the application either on-line or in a face-to-face environment and removes the need for the applicant to manually send their Bank Statements.

The service employs bank level encryption and security and is in use today by several FCA authorised entities.

If you would like more information on BankVision please come and see us at the Credit Today awards or contact Claire Januszczak (ClaireJ@lendingmetrics.com), our in house product expert for more information.

MPs demand more action on Real-Time data sharing
15/03/2016

In a widely under-reported debate in the House of Commons a few weeks ago, MPs from both sides were arguing for stronger enforcement of Real-Time data sharing amongst HCSTC providers, with some appearing to criticise the approach taken so far by the FCA.
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It is clear from the comments made in the chamber that MPs remain unimpressed by the approach taken so far and are seeking mandatory sharing and use of Real-Time credit data, with one MP commenting that the case is "compelling"

The MP for Makerfield, Yvonne Fovargue, claimed that in the case of one of her constituents who "got into £107,000 of debt in 3 days...... if Real-Time credit scoring had been in place on the High Street, she would not have got into such enormous debt"

The Economic Secretary to the Treasury replied by stating that "The Government have made it clear to lenders that appropriate real-time credit data sharing can greatly assist in making more accurate affordability assessments" and added that the FCA "is currently considering the responses to a consultation that includes its approach to real-time data sharing." Many of us had believed that in 2014 the FCA would deal definitively with this matter by mandating the sharing and use of Real-Time credit data in the HCSTC sector. However their approach has left many in doubt as to their obligations, and the result is far from perfect.

It is notable that within the debate there were several references to "Veritec", "a regulatory database" and that "A system should be considered real-time only if every inquiry and every lending decision is updated instantaneously across 100% of the market." This language suggest to me that what is being argued for is a single regulatory database.

LendingMetrics and others have long argued for mandated Real-Time credit data sharing by all HCSTC providers, thus allowing a number of competitor Credit Reference Agencies, ourselves included, to use that data to innovate and develop added value and competitively priced products. We are opposed in principle to a single regulatory database as we believe that such a solution would in fact stifle competition and innovation, leading to poorer products for lenders and disadvantaging consumers in the long-term. For our argument to win the day, there must be much better engagement from HCSTC lenders in order to secure 100% coverage and thereby demonstrate that our approach works better than a single regulatory database.

Our fear is, that as has happened in the past, lenders will resist change until it is forced upon them by regulation, and in a way that is far more stringent and restrictive than would have otherwise been the case.


Full debate transcript below:

Chris Evans (Islwyn) (Lab/Co-op): Thank you for calling me to speak, Madam Deputy Speaker; it is a pleasure. I have been in this House for six years in May, and this is the first time I have ever been granted an end-of-day Adjournment debate. I am delighted to have the opportunity to debate the topic of real-time credit scoring. For me, this is a very important issue, especially in the wake of several financial scandals over the years. The financial crash of 2008 proved one thing—that banking needs reform.

Whenever I think of banking, I think of the need for reform. Most people who use banks will want to borrow money and, unfortunately, personal lending and personal loans are the last area to be considered for reform by the Government.

Real-time credit scoring makes complete sense. The term describes the sharing of data from the credit reference agencies in real time or as close to real time as possible. This requires sufficiently up-to-date and complete relevant data from all the banks and financial institutions. People expect choice in any walk of life. It is what our system is based on. In the market for personal loans, the choice is too narrow and too clearly focused on the banks. Real-time credit scoring would shake up the market and bring about real change for consumers and banks.

The Financial Conduct Authority is looking at the issue. The case for regulation to enable data sharing to happen safely and effectively is compelling. If consumers could ask their banks to share real-time data about their account with a prospective lender, lenders could assess affordability more accurately, meaning that they could make more capital available to consumers with lower risk, thereby driving down cost.


Julian Knight (Solihull) (Con): I congratulate the hon. Gentleman on securing this debate on a very important topic. I support his call for real-time credit scoring, which needs to be explored further. In my previous occupation as a financial journalist, I dealt with a lady who got into £107,000 of debt in three days, following a relationship breakdown. If real-time credit scoring had been in place on the high street, she would not have got into such enormous debt, which caused further mental health issues. Perhaps the hon. Gentleman will reflect on that.


Chris Evans: I will develop that argument further. The hon. Gentleman identifies the nub of the problem—the delay in credit scoring needs to be addressed. That is common sense and I hope the Government will grasp the nettle.


Yvonne Fovargue (Makerfield) (Lab): I congratulate my hon. Friend on obtaining this debate. Does he agree that it is not just consumers who would benefit, but new entrants to the market who are lending for the medium term would be able to come in without having to buy two databases: the payday loan database, which operates



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in real time, and the other database that operates for banks and other financial institutions, which is at least a month behind?


Chris Evans: My hon. Friend speaks with some expertise. I pay tribute to the amount of work she has done on payday lending and raising the issues associated with it. She is right. The real problem is that the banks have a stranglehold on lending. They jealously guard their data and they are suspicious of the Data Protection Act. They therefore keep out of the market major competitors who could bring down interest rates, which is what we all want to see.


Jim Shannon (Strangford) (DUP): The hon. Gentleman is very gracious and I thank him for giving way. Credit risk is one of the top issues in financial services and there is a need for services to be automated. Is there a possibility through real-time credit scoring to provide new, exciting jobs in a well-paid high-end market? That would be a plus, if it was done in the right way.


Chris Evans: The hon. Gentleman is right. The more competitors there are in the market, the more jobs and the more specialised jobs there will be. I pay tribute to the hon. Gentleman, who speaks on every single topic. We have often joked privately that Westminster Hall is his lounge in the morning, as he speaks there so often. Coming from Northern Ireland and Wales, which have great similarities—both are heavily reliant on public sector jobs—the hon. Gentleman and I know that real-time data sharing and more competitors in the market would bring the private sector jobs that areas such as mine, his and the north-east are crying out for. Currently, consumers pay the high costs in two ways. Consumers who can afford credit pay more than they should, and consumers to whom lenders ought not to lend are able to access credit even when it is not affordable. Better data would reduce both these problems, to the benefit of all concerned. So who would be the big losers if the Financial Conduct Authority acts? The banks and the incumbent lenders, but I do not think they would be losers. They would have to up their game and offer innovative products such as those that the hon. Gentleman mentioned. The FCA should also be ready to act in the teeth of resistance and entrenched interests, to further the interests of the consumer and our constituents.

I want to provide some background information to data sharing in consumer credit markets. An important interaction in the consumer credit market is the way in which lenders, particularly unsecured lenders—or, as we know them, high-cost, short-term credit lenders—assess a prospective borrower’s creditworthiness before agreeing whether to lend to them and setting the terms on which the loan is made. Lenders rely on information about a borrower’s creditworthiness from a range of services, including information supplied directly by the potential borrower as part of their loan application and information obtained from credit reference agencies.

Credit reference agencies aggregate information about the individual borrower’s personal information, past credit history and current credit commitments, and they supply that information to lenders on commercial terms. The three main credit reference agencies in the UK are Experian, Equifax and Callcredit. The way in which credit reference agencies aggregate and supply information.



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is not regulated by the FCA, but operates on an industry-wide reciprocal basis. There is no requirement on individual lenders to share information, and although banks, which hold the most critical current account information, have the most detailed overview of a customer’s financial position, they do not in general supply data to credit reference agencies—of course not, because the data give them a leg up into the market and an advantage over other providers.

Veritec states that payday lenders have, as we all know, consistently failed to act in the best interests of consumers. Previous efforts to allow the UK payday lending industry to self-regulate have not succeeded, and tragic cases have come to light whereby individuals have become trapped in a downward spiral of debt through multiple, simultaneous loans. The actions of payday loan companies should be monitored by the FCA, and a database with real-time information on existing loans is required.

I do not want anyone to think that I want short-term lending to be banned. It is a massive industry that creates jobs for people. There is obviously a need for it, otherwise there would not be so much money in the market, but I believe that tools have to be made available so that decisions can be made about creditworthiness.

Crucially, not all lenders report data to more than one credit reference agency, and a reliance on credit reference agencies has played a key role in the downfall of the implementation of FCA rules and consumer protection. It is disappointing that the FCA will not consult on real-time data sharing requirements at this time.

Only a database with real-time information on existing loans will protect consumers from potential harm. A system should be considered real time only if every inquiry and every lending decision is updated instantaneously across 100% of the market. That would allow for lenders to know immediately if a consumer is eligible for a loan under the FCA’s responsible lending rules. However, the reciprocal principles that underpin data sharing require that lenders provide data to credit reference agencies “on a regular basis”, usually a minimum of once a month. Even where data are provided monthly, they can be as much as 60 days old by the time they are made available to other lenders.

The fact that lenders may routinely not have access to the most recent 60 days of a consumer’s credit history creates serious consequences for competition and, above all, consumer welfare, with the potential for unaffordable levels of debt. The question as to which lenders share information is an entirely commercial decision, and it is left to lenders to assess whether it is in their interests. They do not have to take into account any other information, such as the wider benefits to consumers.

Rather than just talking about affordability, it is very important to take a customer’s lifestyle into consideration, as happens when people take out mortgages. If we had real-time data sharing, that practice could be spread right across the board in personal lending.

Incumbent lenders, such as bankers, have no incentive to share data. Banks hold the most critical current account information, and the marginal benefit of sharing information and receiving reciprocal information is very small compared with the much larger marginal benefit to smaller lenders, such as unsecured lenders, or high-cost.



2 Feb 2016 : Column 898
short-term credit lenders. That creates a very important market failure. Having unrivalled access to credit data puts the banks in a unique position in considering whether to lend to consumers, and it allows them to lend at the most competitive rate. As a result, smaller lenders and new entrants are placed at a significant competitive disadvantage. That not only restricts competition, but distorts it in favour of one sub-market over another.

In addition, that risks cutting off some consumers from access to credit altogether. If they are unable to obtain a bank loan, such consumers must either rely on other forms of credit, such as unsecured lending or high-cost, short-term credit, or make do without a loan. Lenders want to lend to such under-served customers, but for lenders to be able to offer loans at reasonable interest rates, it is essential that they can minimise the risk of default. That means conducting rigorous affordability assessments, for which they require access to complete and up-to-date credit data.

The Competition and Markets Authority considered real-time data sharing in its payday lending market investigation. In its final report, it stated that it saw significant benefits to implementing real-time data sharing, but:

“We consider that further development of RTDS, specifically the frequency of updates, would benefit borrowers and lenders and that our recommendation is not redundant”.

In response to the report, the FCA was asked to consult on a range of issues, including real-time data sharing, in the high-cost, short-term credit market. In its consultation paper, the FCA stated:

“Although we see clear benefits to real-time data sharing, we do not propose to consult on introducing real-time data sharing requirements at this time.”

The FCA’s proposed approach is, in effect, to do nothing and assume that the issues associated with real-time data sharing will work themselves out through a combination of time and commercial pressures. It is true that entrepreneurial new companies are developing systems and services that use existing arrangements that are already available to consumers, such as online banking, to offer something approaching real-time credit data. Although there is scope for technology to make sharing faster and easier, unless real-time data sharing is supported by regulatory requirements from the FCA, it is likely to be opposed as a result of commercial pressures by large incumbent lenders to prevent more effective competition.

New technological solutions show that there are few material costs to implementing real-time data sharing. IT systems are already geared to real-time data sharing, and it is clear that financial institutions can mobilise their account information to support real-time data sharing for their own purposes without any difficulty. I have also been informed of the benefits of a regulatory database. A database would allow instant monitoring of loans and of the whole high-cost, short-term credit market, which can be simplified into a traffic light system for lenders and alerts when loans are made outside regulatory rules. If all applications were processed using the database, regulators would have certainty that the rules were being followed at point of sale in store or online. In addition, because the data are not shared among creditors and are used only by the regulator, commercially sensitive information and customer data are not bought and sold.



2 Feb 2016 : Column 899
The Financial Conduct Authority should ensure that any real-time data are used to ensure compliance at every step of the lending process. That can be achieved only if all lenders of short-term, high-cost credit report data into a real-time FCA database. The payday loan market operates best, and consumers are best protected, when a database is in place. Alongside that, high-level scrutiny and enforcement activity are required to limit and prohibit illegal lending.

The absence of real-time data sharing is important for two principal reasons. First, it is a partial cause of unaffordable personal debt. Consumers may be granted loans which they cannot truly afford, because providers do not have up-to-date information about their most recent liabilities and missed payments. Secondly, it is a critical factor that limits the degree and effectiveness of competition within many overlapping consumer credit markets, because it discourages providers from entering the market and limits their ability to compete fairly if they do enter. The FCA must revise its proposed strategy and develop long-term, future-proof regulatory solutions that promote real-time data sharing and enable the innovative use of new technology.

In our society, many people, whatever their political persuasion, believe that the Government are no longer on their side. Real-time data sharing, to me, is absolute common sense, and it can be adopted with a few simple steps. It is time, through this simple measure, for the Government to show that they can stand up to large corporations and organisations that are quite clearly trying to rig the market in their favour.



7.39pm

The Economic Secretary to the Treasury (Harriett Baldwin): I congratulate the hon. Member for Islwyn (Chris Evans) on securing this very interesting debate. I want to assure him that my key priority as Economic Secretary is to ensure that financial services are on the side of people who work hard and who want to do the right thing and get on in life. Financial services should help people to achieve their aspirations at every stage of their lives, whether they are saving for their first home, taking out a mortgage, buying a car or saving and investing for their retirement.
This Government have fundamentally reformed the regulation of the consumer credit market to deliver our vision of one that is well functioning and sustainable and, vitally, can meet consumers’ needs. That is why we created a more robust regulatory system and transferred regulatory responsibility for consumer credit from the Office of Fair Trading to the Financial Conduct Authority in April 2014. The regime was designed to strike the right balance between proportionality and consumer protection. The FCA thoroughly assesses every single consumer credit firm’s fitness to trade as part of the authorisation process, and it has put in place binding standards. It proactively monitors the consumer credit market, focusing on the areas most likely to cause consumers harm. This Government have ensured that the FCA has robust powers to protect consumers.

It is very important that lenders act responsibly when deciding whether to grant credit and how much to give. The FCA makes it clear that a firm should lend responsibly, and that it should take reasonable steps to assess the



2 Feb 2016 : Column 900
customer’s ability to meet repayments in a sustainable manner, without having to borrow further. The hon. Gentleman is right that, ultimately, credit should only be extended to a consumer if they can afford it. Improving creditworthiness assessments will help to deliver a lower risk and a more affordable credit market.

When the responsibility for regulating consumer credit was transferred, the FCA turned key elements of the OFT’s “Irresponsible lending” guidance into binding rules. The rules set out that a firm should assess the customer’s creditworthiness with regard to the potential for the commitments to impact adversely on the consumer’s financial situation, and the consumer’s ability to make payments as they fall due. Although the FCA requires firms to undertake a creditworthiness assessment, including on the affordability of credit, it does not require firms to share or use all available credit data, whether real-time or otherwise, as the hon. Gentleman pointed out.

Providing lenders with a broad spread of information on which to base their lending decisions facilitates better decisions. The UK has a competitive credit information market that delivers this function. Credit data are shared by lenders through private credit reference agencies—the hon. Gentleman mentioned the three main ones—and lenders of all types provide credit reference agencies with information, including about traditional and non-traditional lenders. Providers of non-credit services, such as utilities, share data with credit reference agencies.

There are no specific FCA rules regarding the sharing of credit data in real time and there is no standard definition of what constitutes real-time data sharing, but the general principles that lenders follow when sharing data are set out in the “Principles of Reciprocity”, as drawn up by the credit industry in collaboration with the Information Commissioner. The principles mean that lenders can access only the same type of data that they share with other lenders. For real-time data sharing, they would need to report data in real time to each other if they wanted to access such data to inform creditworthiness assessments from other firms. Nothing currently prevents them from doing so. The Government have made it clear to lenders that appropriate real-time credit data sharing can greatly assist in making more accurate affordability assessments. Real-time credit data sharing allows firms to see whether an individual has credit agreements with other providers, and gives them a much better understanding of their burdens.

As I am sure the hon. Gentleman would agree—he mentioned this a few times—these issues are particularly salient in the high-cost, short-term credit market. Owing to the nature of that market, the availability of accurate and up-to-date data is all the more important. The FCA has said that there has been substantial recent progress by the industry in real-time credit data sharing for high-cost, short-term lenders. In fact, over 90% of high-cost, short-term lenders by market share currently meet the FCA’s expectations to share data in real time. The FCA expects the proportion of high-cost, short-term credit firms using real-time data sharing to increase further by the time the authorisation process is complete for most high-cost, short-term credit firms. However, it will continue to press for further improvements to ensure that up-to-date information is available to enable lenders to make more accurate affordability assessments that deliver better outcomes for consumers.



2 Feb 2016 : Column 901
That reflects the Government’s general approach to regulation, which focuses on the areas that are most likely to cause harm. There is obviously a particular risk in the payday market, which is why we capped the total cost of payday loans and why the FCA has placed expectations for real-time data sharing on this market.

It is worth noting that real-time data sharing is not a panacea. While credit reference agencies are a key part of the consumer credit market and are regulated by the FCA, the information record does not necessarily provide a complete picture of the consumer’s financial situation. Therefore, improving the depth and breadth of the data, rather than the timing, is more important to the affordability of credit.

The decentralised nature of the UK’s system of credit referencing means that credit reference agencies are well placed to respond to this challenge. Unlike some other markets that are highly centralised, credit reference agencies in the UK compete on the extent and timeliness of their data coverage. As such, it is in their interest to provide as much relevant data about consumers in the most timely manner possible in order to assist lenders in making the most accurate affordability assessments possible. One credit reference agency recently launched an initiative that will enable the use of social rent, as well as utilities data. That could assist consumers with thin credit files to access more affordable credit.

The FCA will continue to challenge payday lenders, as part of its ongoing authorisation process, about the robustness of their affordability assessments and their use of real-time data. It is currently considering the responses to a consultation that includes its approach to real-time data sharing. More widely, the FCA is looking into how firms assess creditworthiness and affordability, including how consumers may be protected from taking on unmanageable debt.

The Government are committed to developing the FinTech sector so that this country becomes the global hub for financial innovation, giving consumers greater choice and access to credit in the process. The hon. Member for Islwyn mentioned the potential for jobs and economic activity, as did the hon. Member for



2 Feb 2016 : Column 902
Strangford (Jim Shannon) when he was here. The FinTech industry will be crucial in meeting these objectives, particularly in fostering a climate that encourages data sharing and gives consumers greater choice in the process.

I assure the hon. Member for Islwyn that our FinTech industry is a world leader. In 2014, it contributed £20 billion to GDP and employed 135,000 people. Its development has kept our financial services sector at the cutting edge of innovation, increased competition and choice for consumers, and helped businesses to get better services. I see the developments that we are discussing very much within that context. The Government have taken a range of actions to support alternative lenders and the digital currency sector. We have appointed Britain’s first special envoy for FinTech, Eileen Burbidge, to support our engagement with the sector. We have worked with the FCA to create the right regulatory environment for the sector to flourish, while protecting consumers.

The Government are working with industry to deliver a framework for the open application programming interface. In plain English, that will mean that the banks’ data and computer languages are much more accessible to other computers and FinTech firms. That will deliver greater competition and innovation, particularly in the personal and business current account sectors, by enabling innovative third-party firms, such as FinTechs, to make use of bank data in the interests of customers. Within this innovative space, there is scope for FinTechs to shape the consumer credit market positively and to do more on real-time credit information. For example, the FCA is considering opening access to consumers’ credit card usage data to other market participants.

I thank the hon. Member for Islwyn and congratulate him once again on raising a very interesting subject for debate this evening. I stress that the Government and the FCA understand the importance of this matter to his constituents and to the country.

FCA permission approvals accelerate
22/02/2016

We have been keeping a close eye on the FCA approvals register and it appears they have had a busy few weeks. There has been a notable increase in the rate of approvals for consumer credit permissions and certainly among our clients, the news has been universally positive.
Read More

On behalf of LendingMetrics & Laps IT we wish to congratulate all of our customers who have already received their permissions, and for the few who are still working on it, we wish you all the best of luck, we are right behind you.


2016 has started very positively and we are looking forward to working closely with our customers to build real momentum this year.

WageDayAdvance joins Equifax Real-time Exchange
05/01/2016

WageDayAdvance is the latest lender to join Equifax Real-time Exchange and contribute short-term loan performance information.
Read More

The consolidated data from Equifax Real-time Exchange is designed to support lenders in making responsible lending decisions throughout the application process, from pre-funding through to loan performance analysis.

It aims to deliver greater predictive capability by providing real-time insights, reporting and referencing short –term loan performance. Equifax Real-time Exchange encourages comprehensive data sharing within the alternative credit sector enabling lenders, large and small, to deliver better outcomes for consumers. The exchange of this information between lenders to better assess a customer’s financial situation, helps deliver robust affordability assessments and reduces the risk of fraud.

Since its launch as an online lender more than a decade ago, WageDayAdvance has been offering consumers unsecured loans of up to £1000 on a short-term basis.

Craig Tebbutt, Head of Alternative Lending, Equifax, says: “The regulatory environment for alternative lenders continues to evolve and we think it’s vital that lenders have access to real-time data to make better lending decisions. We have a strong presence in the sector and are helping lenders to share information that facilitates better business decisions.”

“We believe that online lenders need to have a live view of borrowers’ loan commitments. This can only be obtained by using genuine real-time data and Equifax considers this an integral part of responsible lending and affordability assessments.”

Tim Trailor, Chief Risk Officer, WageDayAdvance says: “Equifax has been making sizable efforts and developing innovative solutions to support the alternative lending space. It was important for us to find a credible partner that had the required market expertise and would provide the flexible reporting options that made data easy to share quickly and accurately. Having reviewed all of the options in the market Equifax Real-time Exchange stood out as the most appropriate solution to meet our requirements.”

Please view the article on the CreditMan website here

LendingMetrics Sponsor the CCTA
10/12/2015

LendingMetrics were one of the main sponsors of the CCTA in November 2015. Read More

Overall the conference was a great success, providing vast insight into improved lender practices as well as gaining new industry contacts and partnership opportunities. As a quick overview DAY One “MAKING THE FCA CUT - THE WORK” dealt with the practicalities of making a business work under the FCA, putting those businesses with the greatest perceived risk under the microscope. The CCTA’s intention was to explore a case for ‘undue focus’ on sub-prime lending versus a potential ‘soft touch’ applied to main stream credit. The CCTA aim was to highlight the risks, map the course and provide the tools the market needs to succeed and grow, which it did well.


Day Two “MAKING THE FCA CUT – THE VISION” uncovered a vision of the future, embracing a united consumer credit arena. It was an aspirational look beyond authorisation, when the dust has settled and the wrinkles have been ironed out. A future where trust, fairness and ethical leadership are a ‘work culture’ hard wired into an industry to be proud of.

LendingMetrics believe the industry is now striving to achieve the required culture of integrity, fair practice and transparency against rising odds, and the CCTA conference reiterated this, although this journey will take strong leadership.

TrueTime® Searching Pool forecast to hit 4 Million by the end of 2015
15/09/2015

Based on current increases in reporting volumes LendingMetrics are now forecasting that the pool of cases that may be returned in a search request will hit 4 million by the end of 2015... Read More

When a lender runs a TrueTime® search, the response is limited to the most recent 100 lead-looks in the last 3-days, the most recent 100 applications in the last 90 days, but with all funded loans ever.

With the unique position of being able to return lead-look and applications (that have not yet or did not get funded) this pool of data means lenders can quickly assess client velocity and identify anomalies in the application submitted.

With a pool of data this large you can be sure that you really can make informed decisions when assessing an application. The data supplied to TrueTime is based on all four key stages addressing the FCA’s requirement to treat the customer fairly, promote responsible lending and prevent over indebtedness:

Leads>> Control lead costs and hold providers accountable
Applications>> Identify real-time fraud
Decisions in Principle>> Assess if other approved loans are awaiting funding
Closed and open Loans>> Assess affordability & past loan performance

By bringing together the ability to assess the 4 key stages TrueTime is a truly comprehensive solution for the ever faster moving digital world of lending. LendingMetrics have built the TrueTime database to be an all-inclusive live platform that uses extensive reporting methods which are maintained with to the highest levels of integrity, security and accuracy.

The level of reporting which is accepted by TrueTime enables lenders to have a real-time view of the consumer’s current indebtedness by presenting an accurate and granular picture of their past loan performance, application and underwriting data helping you to minimise credit risk.

LendingMetrics continue to grow their strategic partnership with Equifax to enhance the power of TrueTime, through this partnership you can be sure that the TrueTime database will continue to evolve and meet the ever changing needs of the lending sector.

LendingMetrics are dedicated to providing the most cultivated real-time data solution and are regularly engaging with new data providers to ensure that the growth of the TrueTime database that they have seen so far this year maintains momentum.

The TrueTime® Journey! What Next for Real-time Data?
03/09/2015

WHATS HAPPENED SO FAR?
During the investigation of the High Cost Short Term Credit industry (HCSTC) the financial services regulator, (the FCA) called for the industry to urgently improve real-time data sharing for the benefit of consumers and required firms to improve the way in which they share credit information about consumers. The aim was to ensure that affordability assessments would be based upon accurate and up to date information... Read More

The FCA’s work has also been widely referred to by the Competition and Markets Authority (CMA) as it recently finalised its remedies for the HCSTC sector. The CMA have proposed to increase effective competition in the interests of consumers, aiming to lower payday costs and help consumers obtain a better deal. The CMA is encouraging the FCA to push on further with its real-time data sharing proposals and this, it believes, will assist new lenders entering the market to succeed by better assessing credit risks, it then follows that market competition should increase.

Long before the FCA’s guidance was introduced bureaus like LendingMetrics had offered comprehensive real-time data sharing solutions to lenders who recognised the consumer benefits but who also saw the obvious commercial benefits. The reaction by the mainstream CRA’s has been to announce either non-real-time products or products which provide a relatively small amount of intelligence in real-time.

LENDERS SHOULD BE INVESTIGATING HOW TO SHARE WITH ALL 3 MAJOR CRA’S TO DIRECTLY ADDRESS THE FCA STRATEGY
Real-time data has entered a significant phase in its evolution in the HCSTC market now that it is under the control of the FCA. In their consultation the FCA stated that they expected to see the vast majority of lenders in the HCSTC market participating in real-time data sharing by November 2014. The jury is out on whether or not the “90% of lenders sharing” target has been hit, but few would argue that significant progress has been made. For example, in 2015 LendingMetrics have seen the majority of firms willing to share and use real-time data. Firms must not however be complacent, the FCA have made it clear that they want firms to share data more widely in order to improve the coverage of real-time databases and therefore lenders should be investigating how to share with all 3 major CRA’s to directly address the FCA strategy.

TURNING COMPLIANCE INTO STRATEGIC ADVANTAGE!
The introduction of a real-time data sharing regime was an essential part of the FCA’s strategy, it was crucial for better affordability checks, ensuring that lenders were fully aware of borrowers’ existing commitments and preventing people from accessing multiple unaffordable loans.

In 2014 one of the world’s largest credit referencing agencies Equifax, the leading consumer indebtedness insights expert, partnered with LendingMetrics to expand the first truly real-time HCSTC data sharing system. This partnership marked a step-change in the availability of tools to support lenders in making responsible lending decisions and prevent over-indebtedness.

LendingMetrics has been offering the most comprehensive real-time data solution available in the UK market since 2009 and have been at the forefront of helping lenders to strategically utilise real-time data.

The TrueTime® data sharing platform and the Equifax Real-Time Exchange (both of which access a single exclusive database) directly address the FCA's position on real-time data sharing and affordability checks. The key to the power of the database is its live and comprehensive reporting methods which are maintained to the highest levels of integrity, security and accuracy. A true “up to the second” real-time data sharing platform for credit providers to report Lead, Application and Loan information, also making it a comprehensive solution for the online world.

LendingMetrics and Equifax are currently the only CRA to report all 4 key stages addressing FCA requirements to treat the customer fairly, promote responsible lending and prevent over indebtedness. These four key stages are:

  • Leads (Control lead costs & hold providers accountable)
  • Applications (Identify real-time anomalies in the data)
  • Decisions In Principle (Assess if other approved loans are awaiting funding)
  • Closed and Open Loans (Assess affordability and past loan performance)

FUTURE PROOFING REAL-TIME DATA!
The FCA have to date not fully defined what real-time means, and as such they currently include daily batch platforms as acceptable. However this is likely to change and the TrueTime platform has been built based on true real-time principles. In that regard it remains the leading technical solution and is totally future-proofed should regulations change further in the coming months.

Until this happens LendingMetrics are supporting the lending industry to achieve the widest possible data sharing with the least disruption and therefore are currently accepting daily reporting files. Lenders who already report in a daily batch elsewhere can use the same format to share with LendingMetrics and thereby seamlessly share with multiple bureaus without the need for further IT resource. For those determined to share in genuine real-time LendingMetrics is providing onsite development assistance to integrate the service for both searching and reporting.

The CMA also appears to be proposing further development of real-time data sharing systems with measures to understand a borrower’s affordability whilst also helping them to shop around without damaging their credit record. TrueTime tackles this by offering lenders a quotation search option. A quotation search is only visible to the applicant and is intended to be used when providing a quotation for a credit facility, such as assessing whether or not to purchase a consumer loan lead, when offering terms via a price comparison website or if a consumer is in arrears and an up-to-date picture is needed to assess if they are in financial difficulty. The CMA have required HCSTC lenders to publish information on an FCA-authorised website who as its primary business, gathers and presents price and/or non-price information about different suppliers’ products and provides comparisons between payday loans in order to allow users to compare those products.

MOVING INTO OTHER SECTORS!
As the FCA expands their focus into other credit sectors, we are starting to see the first wave of non-Short Term High Cost Credit lenders commit to real-time data sharing. TrueTime has had interest from many varied lending channels which see the benefit of using granular real-time data to assess their brands of credit. Even though these other markets are not yet being compelled by the regulator to report or use real-time data, they clearly see the commercial benefit of understanding their applicants’ borrowing habits in real-time. The feedback we have received from multiple sectors is that TrueTime addresses many of the issues which traditional CRA products cannot.

Current real-time data products available are not formally governed by SCORE, so the real-time data provided can be more granular and somewhat more flexible than traditional CRA data. For example TrueTime highlights anomalies in applications such as how many different bank accounts or cards have been used by a consumer to apply for loans over a given period, it can show if the applicant has been circulated by lead generators or if they have approved loans waiting to be funded by other lenders.

WHATS NEXT FOR REAL-TIME DATA?
Credit referencing products especially in the UK are evolving and expanding rapidly and real-time data is at the centre of this evolution. The financial industry needs ways to instantaneously access an applicant’s most recent credit history automatically. Not only will lenders using true real-time data be compliant but they will also have a strategic advantage. TrueTime has been developed to accommodate all spheres of lending including dual applicants, revolving credit inclusive of statement data and fixed term accounts. The FCA are presently conducting research on the credit card market and collaborating with the CMA on current account overdraft charges, will they be next for real-time data?

In a speech by Martin Wheatley, the Former Chief Executive of the FCA at Credit Today's Credit Summit, in London on ‘The growth of the UK credit card market’ he said, “Is there sufficient debate at the margins of the industry, particularly where we see cards issued with low credit limits of a couple of hundred pounds and high APRs – pay-day loans with plastic, if you will?”

Will your current solution cope as real-time data evolves?

For the Second Year LendingMetrics Sponsor the CCTA
18/08/2015

LendingMetrics are delighted to be a main sponsor at the CCTA Conference 2015, on the 4th and 5th November, with day one of the event titled "Making the FCA Cut - The Work" and day two "Making the FCA Cut - The Vision". The CCTA's mission is to "represent the interests of our members to UK and European regulators" aiming to provide the tools to balance commercial needs with compliance. The CCTA conference is a prime opportunity for credit providers to voice their opinions about the challenges they face, but also to gain vital peer industry knowledge on current and future FCA plans, rules and regulations... Read More

In 2014 one of the world's largest credit referencing agencies Equifax, the leading consumer indebtedness insights expert, partnered with LendingMetrics to expand the first truly real-time data sharing system, currently focusing on the HCSTC providers. This partnership marked a step-change in the availability of tools to support lenders in making responsible lending decisions and prevent over-indebtedness, please refer to the press release below.

Press Release

The TrueTime® data sharing platform and the Equifax Real-Time Exchange (both of which access a single exclusive database) directly address the FCA's position on real-time data sharing and affordability checks. A true real-time data sharing platform for credit providers to report Lead, Application and Loan information, also making it a comprehensive solution for the online world.

LendingMetrics and Equifax are currently the only CRA's to report all 4 key stages addressing FCA requirements to treat the customer fairly, promote responsible lending and prevent over-indebtedness. These four key stages are:

  • Leads (Control lead costs & hold providers accountable)
  • Applications (Identify real-time anomalies in the data)
  • Decisions In Principle (Assess if other approved loans are awaiting funding)
  • Closed and Open Loans (Assess affordability and past loan performance)

LendingMetrics also delivers Equifax's credit (Insight) inclusive of the new Short Term Lending Score, bank (Bank Verifier), affordability (EFS Income Verification) and anti-money laundering suite of products. The Equifax data services compliment TrueTime by providing lenders with a complete solution for assessing the credit risk of an applicant.

If you want to find out more then please come and speak to the LendingMetrics Team on stand 3.

CMA Release Proposals to Lower the Cost of Payday Loans
13/08/2015

The CMA (Competition and Markets Authority) who proposed to increase effective competition in the interest of the consumer aiming to lower HCSTC (High Cost Short Term Credit), have today published their final report on the Payday Lending Market. The report identifies measures the CMA have imposed to help borrowers get more lucrative deals by increasing competition between Payday Lenders... Read More

The report has come following a 20 month investigation into the Payday Loan Market by the CMA and follows initial findings which were released in June last year.

The Payday Loan Market in particular, has been under scrutiny since the FCA took over the regulation of the consumer credit market in April 2014, and the CMA report is the latest in a string of new regulations that have been put in place for the HCSTC sector.

As the database continues to grow and TrueTime® evolves it is becoming increasingly appealing to lenders, as the velocity of data that TrueTime can provide is unrivalled within the current marketplace. The evidence of this is clear in the recent signings that LendingMetrics have made with high-profile lenders who have all turned to TrueTime to provide their data.

The CMA has recommended that the FCA move forward with several measures which will force lenders to:

  • Improve the disclosure of late fees and other additional charges
  • Help customers to shop around without unduly affecting their ability to access credit
  • Improve real-time data sharing between lenders and credit reference agencies
  • Ensure that lead generators websites (which sell potential borrowers’ details to lenders and through which 40% of first-time online borrowers access their loans) explain how they operate clearly to consumers

The report concluded that in the current market it is often difficult for the consumer to shop around for short term credit and it is often hard for the consumer to identify the best deal for them, bringing price comparison websites to the forefront of this report. Due to this the CMA have enforced that lenders in the HCSTC sector will be obliged to publish their products on at least one price comparison website (authorised by the FCA), as well as provide existing borrowers with a summary showing the cost of their borrowing’s.

The CMA also highlighted that the cost of credit has not been prominent to the borrower and must be made evident at all stages of the application and loan process to the consumer, providing summary’s to the consumer at stages such as when the borrower settles the account or if the borrower’s account is closed as a result of a default.

LendingMetrics welcome this report as a positive move in restoring consumer confidence within the Payday Loan market, as well good news to ensure that consumers are getting the best deal possible.

The CMA is encouraging the FCA to push on further with its real-time data sharing proposals and this, it believes, will assist new lenders entering the market to succeed by better assessing credit risks, it then follows that market competition should increase. LendingMetrics who have been at the forefront of real-time data continue to address the FCA’s new requirements at the core of their business model and will now look to carry on evolving the products they have on offer to ensure that they continue to address the needs of the lender during this transformation of the HCSTC market. LendingMetrics are able to offer several comprehensive products that can assist with ensuring that lenders are able to meet the needs of the FCA and CMA.

The CMA report will inevitably bring lenders to the forefront of the press, however LendingMetrics believe that this is a step in the right direction for the payday lending sector. As lenders are forced to address the issues highlighted in the report, along with the new requirements of the FCA, the next twelve months is set to be an exciting journey for the market as compliant lenders grow in strength.

The full report can be found here

TrueTime® signs-up the first major Non-HCSTC provider
21/07/2015

LendingMetrics have confirmed that a flagship lender who operate just outside the definition of HCSTC market have announced that they will commence the integration to report to the TrueTime® database using the true real-time method, within a few weeks. The contract was signed last week and following the set-up of reporting they will commence searching the database to have a real-time view of consumers in the HCSTC markets current and potential indebtness by presenting an accurate and granular picture of their loan performance, LeadGen activity, application and underwriting data, helping to minimise credit risk... Read More

This is an exciting move for the future of TrueTime and the LendingMetrics and Equifax partnership, proving that the online lending world is evolving across all sectors. LendingMetrics strive to stay at the forefront of developments with real-time data and this latest development is no exception to the rule.

Bringing lenders on board who are outside of the HCSTC sector is the most recent development in TrueTime’s campaign as the flagship of real-time platforms, ensuring that TrueTime remains ahead of the competition is at the front of LendingMetrics plan, swiftly advancing its technology and versatility to adapt to all types of lenders.

Equally exciting is the new dataset that this new signing will bring to the TrueTime platform, taking reporting and searching on TrueTime to the next level. As TrueTime expands to cross additional sectors of the lending market LendingMetrics are confident that the data it will provide you with is more comprehensive than ever before.

In a speech by Martin Wheatley, (the former Chief Executive of the FCA) at Credit Today’s Credit Summit, in London on ‘the growth of the UK credit market’ he said, “is there sufficient debate at the margins of the industry, particularly where we see cards issued with low credit limits of a couple of hundred pounds and high APR’s, pay day loan with plastic, if you will?”

Will Credit Card be next for real-time data, and will your current CRA solution cope as real-time data evolves?

TrueTime® the future of lending decisions.

TrueTime® Unique Applicant Volume Jumps
14/07/2015

Thanks to the increase in lenders reporting in 2015 and the continued reporting of lead-looks and declined applications, the TrueTime® database now has an estimated coverage of 90% of all applicants for HCSTC applications in the UK... Read More

At the start of 2015 the TrueTime® database had a confirmed 509k unique applicants listed, but this has almost doubled in the first 6 months of the year and TrueTime is now the home of a database of over 1.25 million unique applicants.

LendingMetrics have confirmed that more high-profile lenders are due to start reporting in 2015, so anticipate that funded loans volume and coverage will continue to grow. This growth is exciting not only for LendingMetrics and Equifax but also for the lending industry as TrueTime pushes forward in its crusade to become the most comprehensive real-time data provider in the HCSTC market.

As the database continues to grow and TrueTime evolves it is becoming increasingly appealing to lenders, as the velocity of data that TrueTime can provide is unrivalled within the current marketplace. The evidence of this is clear in the recent signings that LendingMetrics have made with high-profile lenders who have all turned to TrueTime to provide their data.

So with TrueTime emerging as the leading HCSTC database, take the time to consider if your current dated data comes close to the power of TrueTime and what that could mean for your business.

TrueTime® On-boards the first Batch Reporting
18/04/2015

LendingMetrics via its strategic real-time data partnership with Equifax have now confirmed their first Tier-1 lender of the 5 largest HCSTC providers is now reporting to the TrueTime® platform using the new batch reporting process, with 3 other Tier-1 providers having signed contract commitments to do so shortly... Read More

Whilst LendingMetrics views the long-term future of credit agency reporting to be true real-time, to help lenders get started they now accommodate daily batch for Tier-1 lenders. This month LendingMetrics started receiving their first regular daily reporting file from the Tier-1 HCSTC provider. The typical file is between 20-28k records each day and takes just 20 minutes to be processed and updated into the TrueTime database, advancing on previous technological barriers.

Real-time data has entered a significant phase in its evolution in the HCSTC market now that it is under the control of the FCA. In their consultation the FCA stated that they expected to see the vast majority of lenders in the HCSTC market participating in real-time data sharing by November 2014. The jury is out on whether or not the “90% of lenders sharing” target has been hit, but few would argue that significant progress has been made. For example, in 2015 LendingMetrics have seen the majority of firms are willing to share and use real-time data. Firms must not however be complacent, the FCA have made it clear that they want firms to share data more widely in order to improve the coverage of real-time databases and therefore lenders should be investigating how to share with all 3 major CRA’s to directly address the FCA strategy.

TrueTime® Accommodates Batch Reporting and Quotation Searches
10/03/2015

LendingMetrics have adapted the TrueTime® platform to make it easier for lenders to report, by moving swiftly to develop the process that accepts and processes batch reporting files... Read More

The FCA have to date not fully defined what real-time means, and as such they currently include daily batch platforms as acceptable. However this is likely to change and the TrueTime platform has been built based on true real-time principles. In that regard it remains the leading technical solution and is totally future-proofed should regulations change further in the coming months.

Until this happens LendingMetrics are supporting the lending industry to achieve the widest possible data sharing with the least disruption and therefore are currently accepting daily reporting files. Lenders who already report in a daily batch elsewhere can use the same format to share with LendingMetrics and thereby seamlessly share with multiple bureaus without the need for further IT resource. For those determined to share in genuine real-time LendingMetrics is providing onsite development assistance to integrate the service for both searching and reporting.

The CMA also appears to be proposing further development of real-time data sharing systems with measures to understand a borrower’s affordability whilst also helping them to shop around without damaging their credit record. TrueTime tackles this by offering lenders a quotation search option. A quotation search is only visible to the applicant and is intended to be used when providing a quotation for a credit facility, such as assessing whether or not to purchase a consumer loan lead, when offering terms via a price comparison website or if a consumer is in arrears and an up-to-date picture is needed to assess if they are in financial difficulty. The CMA have required HCSTC lenders to publish information on an FCA-authorised website who as its primary business, gathers and presents price and/or non-price information about different suppliers’ products and provides comparisons between payday loans in order to allow users to compare those products.

LendingMetrics launch partnership with Equifax to supply real-time data
17/09/2014

Equifax, the leading consumer indebtedness insights expert, has partnered with LendingMetrics, the High Cost Short Term Credit (HCSTC) and online lending data specialist, to launch the first truly real-time HCSTC data sharing system. This new system marks a step-change in the tools available to support lenders in making responsible lending decisions and prevent over-indebtedness... Read More

The Equifax Real-Time Exchange is distinct in its ability to provide real time insights into HCSTC loans during the entire application process, from pre-funding through to full loan performance. This will provide greater predictive capability for HCSTC lending decisions promoting responsible lending across the sector. Equifax and LendingMetrics believe that this solution will encourage comprehensive data sharing within the sector enabling lenders, large and small, to deliver better outcomes for consumers. Comprehensive data sharing between HCSTC providers is a key focus for the Financial Conduct Authority (FCA) who expects to see 90% of the HCSTC market sharing data with more than one credit reference agency (CRA) by November.

Nishil Khimasia, Performance and Marketing Director, Equifax states: “There is a definite role in the market for access to short term credit. Many people make use of these loans without any difficulty, but there is also a need to ensure financially vulnerable individuals are not allowed to fall into a spiral of debt by being able to access multiple loans via the web in seconds.

“We believe that true real-time data sharing is a priority. The Equifax Real-Time Exchange ensures the fully automated transition of data from client systems into the solution within seconds. This will not only reduce the risk of over-indebtedness relating to HCSTC loans by addressing the issue of loans that are written seconds apart, but support responsible lending decisions across all sectors that offer financial services. We are excited to be at the forefront of this market evolution.”

Commenting on the solution, David Wylie, Managing Director at LendingMetrics said: “The HCSTC lending industry has entered a significant phase in its evolution now that it is under the control of the FCA. We believe that this real-time solution is vital for the industry and the market will benefit both in terms of meeting the regulator’s expectations and in better serving the needs of consumers in a responsible and caring manner. I firmly believe that if the industry is serious about preventing high-velocity over-indebtedness, up-to-the-second data sharing can be the only sustainable way forward.” - (Source - Equifax Press Release)

CMA payday lending Market Investigation
04/08/2014

Working closely alongside the Financial Conduct Authority (FCA), a group of independent Competition and Markets Authority (CMA) panel members are carrying out an investigation into the Short Term Lending market. The Competition and Markets Authority (CMA) has proposed to increase price competition between payday lenders, aiming to set out proposals to lower payday costs and help borrowers get a better deal, the FCA have also stated they will continue to work closely with the CMA as it finalises its remedies. As part of their investigation designed to help competition work effectively in this market The CMA is also proposing further development of real-time data sharing systems with measures to help borrowers shop around without damaging their credit record. This is aimed at assisting new lender entrants better assess credit risks so market completion can increase and the applicant’s true affordability can be measured accurately by all lenders... Read More

Please refer to the enclosure PDF report “Summary of a response hearing with Equifax UK held on Monday 14 July 2014” published by the CMA, which outlines a discussion with Equifax on the value of real-time data and data sharing in general. Link

Throughout the report there is a theme that lenders are reluctant to report their data widely, “The main issue with data sharing was the reluctance of payday lenders to share their data widely. The industry was very fragmented and a payday lender would typically have a relationship with one or possibly two CRAs (a niche and a mainstream CRA)”

Equifax believe, “The move to real-time data sharing between the CRAs would enable them to make the best underwriting decisions”. This is at the forefront of what The CMA is trying to achieve making it possible for new lenders to enter the market and have access to the data they require to make responsible lending decisions that are fair to the consumer.

Equifax have a partnership with LendingMetrics, in which Equifax referred lenders to LendingMetrics for real time data, so within the partnership they offer lenders credit referencing products for the whole loan life cycle, “Equifax have a joint relationship with LendingMetrics whereby Lending Metrics dealt with lenders real-time enquiries and Equifax conducted the ID verification and credit worthiness checks.”

The CMA have noted real-time systems are still evolving, so the CMA have provisionally recommended that The FCA continue to work closely with lenders and CRAs to encourage the development and use of real-time data sharing systems that are open to all payday lenders and other credit providers. The FCA Policy Statement PS14/16 paper affirms “We will continue to press the industry to deliver further improvements in real-time data sharing, and will work with the CMA on its proposed measures relating to data sharing.”

Equifax and LendingMetrics partnership provides vital data
07/06/2012

Integration of Equifax credit data tools and LendingMetrics Dynamic Application Search enables payday lenders to demonstrate proper checking of consumer affordability... Read More

London, June 2012 - Leading credit information provider, Equifax, has signed a long term strategic partnership with LendingMetrics, the payday and online lending data specialist, to provide even greater predictiveness for payday lending decisions. The partnership comes at a crucial time for the payday lending industry as it prepares for its new Code of Practice which comes into force on 25th July 2012.

LendingMetrics launched its unique Dynamic Application Search (DAS) tool in September 2011 to enable payday lenders to share data in order to extend credit responsibly. Already used by an estimated two thirds of the payday market, DAS is playing a crucial role by providing real time loan application and performance data to help payday lenders identify over-indebted consumers who may be attempting to take out multiple loans within a short space of time. It is also identifying fraud in real time. Now, Equifax’s data services will compliment DAS by providing lenders with a complete solution for assessing the risk of a payday loan applicant, helping them to meet the latest OFT and BIS regulatory obligations, as well as combating bank account and ID fraud.

Under the new agreement, Equifax will be providing access to its consumer credit data with its unique data matching accuracy, as well as bespoke credit characteristics developed by Equifax specifically for underwriting within the payday market. Payday lenders will have access to Equifax Insight payment performance data where they share their own payment performance data in return, in according to SCOR reciprocity rules. LendingMetrics users can also benefit from Equifax’s anti-money laundering identity checks and have access to Equifax Bank Check Advanced to confirm the bank account used belongs to the applicant.

David Wylie, Managing Director for LendingMetrics believes this partnership agreement with Equifax will provide payday lenders with vital support as the sector evolves. “The live payday data from DAS, combined with traditional credit data provided by Equifax, gives lenders the ability to ensure they are assessing an individual’s current commitments and their ability to pay back the loan. This will enable lenders to extend credit much more responsibly and assist in bad debt reduction.”

“In response to the focus on lenders from the OFT and government department, BIS, our partnership with Equifax means we can deliver a solution that assists lenders in meeting their obligations by allowing them to make fully informed real-time lending decisions based on a combination of live data and wide market coverage. In particular, the data, knowledge and impressive response times recorded during testing of Equifax’s systems made Equifax the right choice of partner to help us meet the needs of this market.”

New measures agreed by the four main trade bodies, representing 90% of lenders, will go ahead from 25 July 2012. The new Code of Practice requires lenders to make proper affordability checks before granting loans or allowing customers to put off paying the money back (known as a roll over). Through this partnership, Equifax and LendingMetrics are offering a combined solution that helps payday loan providers meet these new commitments.

Craig Tebbutt, Business Development Manager, Financial Services at Equifax, who is leading the company’s initiatives with the Short Term Loan industry adds, “The quality and depth of the combined LendingMetrics and Equifax data means that together we can provide a high number of characteristics, delivering a much more predictive, tailored solution for the payday market. We were impressed by LendingMetrics’ live data capabilities and knowledge of the sector and their true understanding of the challenges faced by lenders operating in this market.”

“With access to live data intelligence, we are helping payday lenders to prevent potential fraud as well as multiple selling of leads by aggregators, whilst also assisting lenders to meet irresponsible lending guidance. This partnership forms part of Equifax’s commitment to helping the payday, and online lending sector generally, identify over indebted customers who are attempting to obtain multiple loans within a short space of time, and to provide lenders with up to the second loan performance information. By operating full data sharing, lenders can improve consumer protection and operate best practice.”