Following this announcement, customers, banks, and financial institutions will be enabled to access improved insights and probabilistic estimates into individuals, with diverse and secure income streams. In addition, lenders will be given the possibility to support a growing segment of the workforce that usually is excluded from a full range of credit products and services.
The new approach of the company is set to provide lenders with a more accurate profile of the overall financial vulnerability and affordability of a borrower, enabling a more personalised and appropriate suite of credit products that can be delivered.
The Income Verification Tool uses transaction data in order to provide lenders with detailed insights and probabilistic estimates into the income streams of prospective borrowers while providing an overview of their financial position in real-time as well.
For the individuals who are self-employed or part of the gig economy (which are harder to verify and assess by the lender as they do not have an ongoing single source of income as salaried employees have), lenders will be enabled to assess their affordability and creditworthiness by using the new product. This process will reduce the risk of the customers being unfairly excluded from accessing credit in a secure and efficient manner.
The solution was designed upon Fuse’s existing transaction capabilities, and it leveraged advanced machine learning (ML) and Natural Language Processing services in order to deliver detailed insights into a customer’s financial situation. In addition, it also uses insights to provide lenders with the possibility to make fast, secure, and accurate lending decisions. They will also be enabled to use up-to-date transaction information without being reliant on the data associated with the overall traditional credit assessment procedure. This aims to allow clients to increase acceptance and develop their customer base while meeting their needs, preferences, and demands at the same time.
By having the capability to use technology in order to assess affordability, lenders will be enabled to enter new markets in a fast and secure manner, while also providing credit options in a responsible way. The long-term plan is set on the development of the financial health of the borrower.
According to the press release, the Income Verification Tool model was trained by using data from the Pave application. This represents a subscription-based, credit health builder app that caters to multiple underserved groups that exist in the credit market. The product operated on data that is collected from more than 20 banks and financial institutions, all of which have different standards, requirements, and conventions for how transaction information is formatted.
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