Equifax develops new products ahead of open banking initiative
Ahead of the 2018 open banking initiative, Equifax and Castlight have joined forces with Oakbrook Finance to develop new products.
Oakbrook is the owner of Likely Loans that offers unsecured personal loans with the near-prime sector in mind.
Credit reference agency Equifax said bank transaction data will play a crucial role in lending decisions when opening banking comes into force.
It said lenders will have access to real-time and historic account and transaction information, boosting transparency when reviewing loan applications.
As part of the collaboration, Equifax is already developing some products that will capture bank transaction data to build characteristics of the individual applying for a financial product.
The firm said this will provide a clearer picture of a borrower’s financial position and reducing friction in the customer application process.
Since the start of this year, Oakbrook has been utilising the Castlight Affordability Passport tool with Equifax data integrated.
The passport gives consumers a secure platform to share their transactional data with the product provider so the provider can have a better view of the customer’s income and expenditure.
Martin Leonard, chief operating officer at financial capability company Castlight, said this tool will enable lenders like Oakbrook to have a more accurate view of a person’s financial capabilities and be better placed to assess their risk level.
He said: “This alliance is an important step towards offering those with poor or flat credit files the opportunity to access finance.”
Jake Ranson, banking and financial institutions expert at Equifax, said: “Open Banking will radically change the way people assess their finance options and financial companies have a responsibility to ensure a smooth transition into this new environment.”