Getting all the right information to make a credit decision is the big challenge faced by banks and lenders today.
The Basiq Affordability Report provides all the facts you need to get a full view of a customer's financial position.
With the spotlight on 'Responsible Lending', banks and lenders are looking for innovative solutions in the market. The Royal Commission inquiry has uncovered some of the following issues in the credit decisioning process:
- 'one size fits all' approach rather than assessment of each individuals financial health based on spend by category
- unverified expense information manually gathered from the customer rather than verified and categorised expenses
- actual customer expenses replaced with conservative benchmarks (derived from sources such as Australian Bureau of Statistics)
Who is interested in the Affordability Report?
The Basiq Affordability report is used by banks and lenders when making decisions around credit.
To assist in credit decisioning and ongoing serviceability for larger amounts (such as home loans), the Affordability report uses categorised bank transactions in a meaningful way.
There is a simplified version of the report to verify customer income, summarise expenses and confirm bank account details. This is used to assess SACC (Small Amount Credit Contract) loans offered by alternative lenders, or other decisions such as car lease or real estate rentals.
What is the Affordability Report?
Basiq's Open Banking platform is used to categorise transaction banking records which are summarised into our powerful Affordability report.
By interrogating up to 2 years worth of an individuals bank transaction data we are able to provide summary reports which includes:
- cash-based assets
- liabilities (existing loans and credit card balances and limits)
- primary sources of income (and regularity)
- summary of expenses broken down by month.
By using industry standard categorisation (derived from the Australian Bureau of Statistics) lenders can take advantage of data from multiple bank data, returned as a single report. This allows lenders to prepare for and take advantage of Open Banking data when it is ready.
Want to know more? Check out this blog to Learn more about the Basiq Affordability Report.
What can you build with this? Our partners use Basiq's Open Banking Platform and powerful categorisation and enhancement engine in many different ways. Credit decisioning, pre-fill of fact finds for Financial Advisers, easier on-boarding of banking customers, targeted financial advice, balance checks before payments and much more!
Check out the article about Basiq and our partner MyVested:
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