Podcast ¦ RO-AR.com: Hitting the Real Time – Accurate, timely bureau reporting

Key Takeaways

1. In Fact, originally known as In Fact Systems, is one of the four category-one credit bureaus in the UK, alongside Experian, Equifax, and TransUnion.

2. The credit bureau industry faces significant challenges due to the latency in credit data updates, impacting lending decisions.

3. Approximately 20-30% of loan defaults could potentially be identified with intramonth lending insights, indicating a multi-billion-pound missed opportunity in the credit information market.

4. A significant portion of the adult population in the UK (14%) is underserved or excluded from the credit system, emphasising the importance of innovation in credit assessment.

5. The concept of “thin files,” where consumers lack sufficient credit history for accurate risk assessment, exacerbates exclusion and inefficiencies in credit lending.

6. Open banking offers insights into consumer spending but faces challenges such as categorisation, coverage, and conversion, limiting its effectiveness compared to traditional credit reports.

7. In Fact’s Delta platform aims to streamline the reporting process for lenders, cutting the time taken for data validation and submission to credit bureaus.

8. Real-time reporting is becoming essential for lenders to manage risks and improve customer relations, particularly in the context of buy now, pay later (BNPL) products.

9. The regulatory landscape for BNPL is evolving, with a demand for real-time reporting to ensure quality data and transparent decision-making.

10. There is a growing interest in multi-bureau reporting among lenders, which could reduce the prevalence of thin files and improve risk assessment.

11. In Fact is focused on increasing coverage and accuracy in the subprime lending market to lower first payment default rates and enhance financial inclusion.

12. The company’s mission centres on supporting lenders who aim to provide services to underserved populations, leveraging new technologies for better credit outcomes.

Key Statistics

• 20-30% of defaults stem from events that could be identified with real-time data.

• 7.1 million people (14% of the adult population) in the UK are underserved by the credit system.

• Aiming for a first payment default rate of 5%, lower than the current industry standard.

• Over 1.5 million people in the UK use credit unions as of recent years, showing growth in alternative lending.

Key Discussion Points

1. The impact of data latency on the lending market and default rates.

2. The challenges faced by lenders due to thin file classifications.

3. The role of open banking in modern lending alongside traditional credit bureaus.

4. Innovations introduced by In Fact to facilitate easier multi-bureau reporting.

5. The shifting landscape of BNPL products and their integration into the credit framework.

6. The potential for real-time data to transform lending decision-making.

7. The increasing consumer base using credit unions and their importance in financial inclusion.

8. The necessity for improved affordability assessments in subprime lending.

9. The need for systematic improvements in the credit reporting cycle to enhance data quality.

10. The relationship-building process with lenders to promote the benefits of real-time reporting.

11. The demand for better risk management tools from lenders, particularly in automated lending environments.

12. Expansion plans for In Fact’s service offerings in the credit union space.

Podcast Description
In this podcast, Chris engages with James Bryce Lynn, the founding commercial director of In Fact, to discuss the evolution of credit bureaus in the UK and the pressing need for real-time data in lending practices. The conversation explores the challenges posed by data latency, the significance of open banking, and innovative solutions being introduced by In Fact, such as the Delta platform. As financial inclusion becomes increasingly critical, they delve into the importance of serving underserved populations and the transformative impact of modern technology on the credit industry.