New research to improve affordability assessment
The University of Edinburgh, Afterbanks and Inbest are collaborating on a new research project that aims to develop new methods for affordability assessment. On the one hand, they will explore new statistical frameworks to take into account the changing nature of consumers personal circumstances, financial situation and behaviours. On the other hand, they will leverage on Open Banking to not only asses whether the credit is affordable at the point is taken out, but also throughout its whole life.
This research follows the new FCA regulation that makes mandatory for consumer credit lenders to include an affordability assessment (i.e. estimate borrower's ability to undertake the credit commitments without incurring into financial struggles) into the wider consumer creditworthiness analysis.
Raffaella Calabrese, Associate Professor at University of Edinburgh Business School, said: “The affordability assessment is not only different between borrowers, but also changes in time for the same borrower when new relevant information is available. By introducing a dynamic time-series analysis we expect to increase the accuracy and robustness in the affordability prediction.”
David Lozano, CEO of Afterbanks, said: “Our platform provides financial data to grant over 30,000 personal loans per month in Spain, and this project is an unparallel opportunity to adapt our data platform to the UK market and regulation. We are also excited to become part of the Scottish Fintech Ecosystem, hand in hand with the University of Edinburgh and Inbest".
Manu Peleteiro, CEO of Inbest, said: “We are delighted to strengthen our partnership with the University of Edinburgh. Our ongoing collaboration has become a source competitive advantage, and the IP we developed helped us to secure projects with large financial providers in Spain. We are also thrilled to welcome Afterbanks - one of the fastest growing Fintech companies in Spain - to the Scottish Fintech ecosystem”.
Afterbanks provides a platform to securely access banking data and initiate payments in real time. Our platform provides access to all banks in Spain and the largest banks in Portugal, Italy and Mexico. It is used by dozens of third-party applications and makes over 100.000 conections a day.
Inbest is a data analytics platform that automates the financial planning process by gathering and analyzing customers’ personal financial information. Inbest enables financial institutions to provide financial products and services to help their customers to manage their day-to-day finances, have the right protection coverage and plan for their life goals.