And serving those struggling financially to access affordable credit quickly
The Centre for Social Impact 2018 report Financial Resilience in Australia found that while between 2016 to 2018 financial resilience in Australia had increased significantly and returned to levels similar to 2015, there were still 2.1 million Australian adults experiencing financial stress. One in six Australians were finding it tough to meet the necessary costs of living and just 1 in 2 were prepared for a rainy day with three or more months’ worth of savings to provide a buffer for unexpected costs.
Fast forward to 2020 and the Covid-19 pandemic (and subsequent economic crisis), had accelerated an already over-exposed society, plunging more into debt (and high risk applicant status). Research by the Melbourne Institute conducted last year revealed Australians vulnerable to financial stress was still over 50%. Even by October 2020 43% of Australian consumers were finding bill payments difficult and 2 in 10 were cutting back on discretionary spending, as found in Experian’s third Global Insights Report. In 2021 consumers face uneven roads to recovery with some ready to spend again and others still mired in pandemic-related financial stress.
For many of these individuals, access to mainstream, affordable finance may no longer be an option. Classed as high risk applicants, more traditional loans are either not available to them or are not suited to their immediate needs. However, their need for credit is even more urgent and they are actively seeking out funds to support them in the short term.
One of the biggest challenges faces by the market is a lack of speed and insight. Processes can be slow and cumbersome, with journeys typically performed manually, taking up to weeks to review and complete. Add to this a more complex and volatile environment, where the assessment of affordability is even more challenging than it was and the need for pace in a digitally accelerated environment is vital. This is continuing to hinder lenders’ ability to support people, and therefore impacting their growth.
This is where technology can help. A cloud-based lending platform, like Experian PowerCurve Customer Acquisition, can provide streamlined, cost effective, digitised and more efficient means of making credit decisions. Traditionally this type of technology would require high levels of investment, putting it beyond the economic reach of many lenders, however it can all be accessed without the burden of investment to build or fund.
By partnering with Experian, lenders can benefit from its breadth and quality of data, and ability to orchestrate the entire decision journey from start to finish. And with Experian’s continued investment in data, analytics and technologies, alongside its cloud hosted originations solution can give lenders an always advancing approach to decisions, enabling them to maximise opportunities now, but be adaptable and agile for future change and needs too, and all without the need to embark on extensive updates or change programs.
Australian fintech and personal loan provider MoneyPlace partnered with Experian to power its credit decisioning with Experian PowerCurve Customer Acquisition.Take a look at the video below to hear more about their early adoption of the solution and some of the ways it has helped them.
A digital decisioning platform, integrated with eligibility, affordability and identity checks, helps lenders move away from slow, manual processes and make faster, more accurate and fairer decisions. This also has the potential to help Australians in financial stress, by not only offering more competitive and appropriate rates, but protecting and supporting consumers from possibly harmful alternatives. As we move through the current volatile environment, it’s partnerships between Experian and lenders such as MoneyPlace, that will enable more progressive and modern approaches to tackle the uncertainties that are yet to come.
If we can assist your business in navigating a new era of credit risk decisioning, please get in touch with us using the form below.
By Mathew Demetriou, General Manager Decision Analytics, Experian A/NZ