Lending Works chief executive Nick Harding has said that lenders need to innovate quickly during the pandemic and look at other credit data sources such as open banking.
He said that Lending Works borrowers representing around eight per cent of the platform’s portfolio took up the option of a payment deferral at the peak of the crisis but that is now down to almost half. Harding said that firms need to adapt quickly to survive Covid-19.
“This will be a long crisis and the aftereffects will always lag behind the reality of what’s happening in society and that’s an example of why open banking can be very powerful,” he said at LendIt Fintech Europe 2020 last month.
“We’re at the end of the beginning for payment deferrals and I believe the next 12 months will be very challenging for firms that can’t innovate quickly or don’t look at other credit data sources.
“And high street banks will have lots of problems, they have traditionally been slow to adapt.”
Harding’s peer-to-peer consumer lending platform already utilises open banking – the data sharing initiative that mandates high street banks to share anonymised customer data with approved third parties.
“Open banking will be adopted much more quickly, and significantly, more firms will use it because of Covid-19 and then customers will be more comfortable with it,” Harding said at the conference.
“More of our major partners have, or are, adopting open banking.”
Lending Works was acquired by alternative investment manager Intriva Capital in July and Harding said that the firm will invest significant resources into the lender.
“You need to try and drag positives out of any situation and we’ve certainly been able to do so,” he said.
“We’re building products on open banking and all in all, it’s a terrible thing to say, but it’s been a good crisis for us and we’re ending the year better than how we started which is pretty incredible.”