Decision 360: Open Finance for better lending decisions

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Record numbers of people are financially excluded. 17.5m people lack access to affordable credit according to Fair4All Finance. There's a shortfall in affordable credit of £3bn.Not having access to affordable credit has been made worse as individuals face high inflation and rising interest rates.NestEgg's data shows those people with lower credit scores use up to 40% of their discretionary spend on high cost credit, reducing their ability to pay **priority bills**. The Financial Conduct Authority (FCA) estimates extra interest **costs households £2bn every year.** Paying high interest makes it harder to afford to live. To make ends meet people borrow. The cycle repeats itself. **Further exclusion** results.Moreover, there's a group of **newly excluded** individuals who've seen expenses rise with inflation and mortgage rates.Legacy loan decisioning systems make it hard for lenders to make quick and fair decisions. They focus too much on Credit Bureau data which fails to take into account the needs of the financially excluded. There's no view of net worth or whether an applicant's financial health is getting better or worse. If an applicant is declined they're not provided with any information about how to improve their chances next time.As a result, **decisions aren't sufficiently aligned with the real circumstances of the borrower nor the risk appetite of the lender.**To ensure a comprehensive view of loan applicants, NestEgg will build a next generation version of its software (Decision 360). Using Open Finance NestEgg's decisioning service will provide:* Insight into credit card behaviours* Details of assets and net worth* Financial health direction indicators* Tips and advice to borrowers using open finance* Machine Learning, improving decisioning algorithms in the long-term.Currently the market is **data siloed.** This project **accelerates** our ability to bring more data sources _together_ for fairer, automated decisioning based on a **more accurate** picture of an applicant.Responsible lenders using Decision360 will:* Increase lending by 30% within six months* Make 180,000 _new_ loans during 2024* Accept 20% of previously declined loans* Increase revenue by £720mBorrowers with poor credit scores will have saved £600m per year compared to using a high cost creditor. 75% of these borrowers will live in the top 20% most deprived neighbourhoods in England and Wales.