Digital consumer lender Fintern has adopted open banking to replace credit scores with real-time affordability in order to reach more borrowers.
Fintern, which received authorisation from the Financial Conduct Authority in February 2021, has integrated its artificial intelligence (AI) platform with open banking to obtain the most accurate view of a borrower’s affordability using real-time transaction information rather than just focusing on historical credit reports and scores.
The company said it will expand access to affordable personal loans in the UK by using open banking data and its AI platform to provide low-cost loans of up to £5,000 to consumers excluded by traditional banks.
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“Fintern will help people to really understand what is affordable for them, rather than offering yet another faceless transactional process,” said Gerald Chappell, co-founder and chief executive of Fintern.
“Currently, lenders either lend money or don’t, and then don’t engage with the borrower again until the loan terms ends or payments are missed.
“Our success as a lender lies in the ability of our customers to repay their loans. Our AI-powered technology helps us and all our customers to understand their finances in a deeper, more hands-on way than ever before.
“This approach allows us to increase approval rates, lower APRs and empower our customers to make the best and most responsible borrowing decisions for them. As we emerge from the Covid-19 pandemic, Fintern is needed now more than ever.
“While many existing lenders are reducing credit supply given the shock to their existing portfolios, Fintern uses high frequency transaction data to understand consumers’ real time financial circumstances and lend responsibly.”
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The lender aims to serve half a million consumers in the UK and originate £1bn of consumer loans by 2025.
“We will be closer to our customers than incumbent lenders can ever be, and this will differentiate us in the marketplace,” said Dr Michelle He, co-founder and chief operating officer of Fintern.
“Intelligently integrating AI and open banking data disrupts credit decisioning for the better of all customers.
“Doing it well requires the right experience. Data and technology are Fintern’s bread and butter. We have an amazing team with extensive experience in digital lending and credit analytics. They are customer obsessed and have made the Fintern app a unique experience.”