540 Real-Time Payments Consumer Lending 

Welcome to Breaking Banks, the number one global fintech radio show and podcast. I’m Brett King. And I’m Jason Henricks.

Every week since 2013, we explore the personalities, startups, innovators, and industry players driving disruption in financial services. From incumbents to unicorns and from cutting edge technology to the people using it to help create a more innovative, inclusive, and healthy financial future. I’m J.P. Nichols, and this is Breaking Banks.

Spring is in the air, and that can only mean one thing. It’s time for Finnovate Spring. We wanted to play two of our favorite episodes where Greg first interviews the folks at the Clearinghouse to talk about the future of real-time payments.

And then another special episode, talking about the cost of living, lending, and insights from a new report from Tink. Finnovate kicks off San Francisco, May 21st to the 23rd. Hopefully I’ll see you there.

I will be doing two pieces, one, moderating a panel on Hot or Not, the AI edition, and then leading a discussion around what do community banks need to do to remain competitive in today’s rate environment. Hi, everybody, and welcome to the Finnovate podcast. Joining me today, we have Jim Colasano, Senior Vice President of the Clearinghouse.

Jim, thanks so much for taking the time to connect with me. Thanks for inviting me, Greg. Excellent.

So I think most people have heard of the Clearinghouse, but can you start with just a quick overview of yourself, your background, and how you came to work at the Clearinghouse? Sure. I’ve actually been in banking and payments in particular for my entire career, which is over 30 years at this point in time. So I’ve been a long-timer.

I’ve worked for JPMorgan Chase as well as HSBC in domestic and global payment positions. About seven years ago, the Clearinghouse reached out to me to come join them to launch the RTP network, which is the first instant payment network in the U.S., and the first new payment rail that was launched in the U.S. in over 45 years. Now, the Clearinghouse itself is a 170-year-old institution.

It’s been around for a long time, and it provides critical payments infrastructure to the financial community. We run high-value, low-value, and check image systems, payment networks. And back in 2017, we launched the RTP network that’s been in operation now for a continuous operation for over six and a half years.

Excellent. So, obviously, we’re here today to talk about real-time payments in more detail. From a personal side, how long have you been interested in that as a concept? And I’ll ask the question, is your interest purely professional, or is there a personal connection somewhere for you as you think about RTP capabilities? Well, I actually started in banking coming right out of college.

And when I started working in banking, paper checks were actually the dominant payment method at the time. And for years, I worked in the check environment, creating some efficiencies. We actually helped launch check image in the early days.

I worked in ACH, and I’ve done a lot of work trying to make payment systems more efficient and more responsive to market demands. And over the years, we’ve seen commerce evolve. We’ve seen technology evolve.

But the payment systems have really stayed the same for almost five decades. And I remember so many conversations late at night with friends and colleagues saying, wouldn’t it be nice if we could just build a platform, a payment platform that worked the right way? And we’re the right people to do it because we know how to build it. And it’s always been a dream of mine.

But you never kind of think that something’s going to happen in your lifetime if nothing’s happened in over 50 years. So when the Clearinghouse came to me seven years ago and said that they were actually going to build this new payment platform and did I want to be a part of it, it was an opportunity that I just couldn’t resist. So this is kind of a dream for me.

And again, a capstone for my career to be able to build the next generation of payment system and launch it in the U.S. Yeah. So while you understand the pain of what a not real-time payment situation can look like, and I think obviously that’s a very common thread with the people and companies that we see come across our radar at Finnovate, there’s a lot of times people will have a really direct experience with, I know how inefficient this process is. I know how painful that inefficiency can be.

And I think that from your standpoint, having seen it for so long, now having the opportunity to go and create something new must be really exciting. I think most people in FinTech have probably a general understanding of what real-time payments can do. But can you put the technology into a little bit of context for our listeners? Who really stands to benefit from using RTP? Where does it sit in the ecosystem? Some kind of high-level pieces like that I think will be helpful for our listeners.

Sure. So the first thing that I think everybody needs to know is that the RTP network sits in between financial institutions. And we are the ones who actually provide the movement of money between financial institutions.

And there are only two organizations in the U.S. that can actually do that. The two network operators, the Federal Reserve and the Clearinghouse. But you will see that a lot of companies are out there in the marketplace today providing what I call instant payment experiences.

So when you go online and you make a payment, there are lots of vendors, a lot of organizations that will create the experience, if you will, of an instant payment. But then they actually take that information and move it over the traditional bank rails, so debit rails or ACH rails, which can take several days to actually move the money with finality. And that’s the problem that we’ve solved with RTP.

And I use the example a lot for people. When you go onto your online banking platform and you make an online payment, the minute you make that payment, you’ll see the money come out of your account instantaneously. So the money’s gone if you take a look at your account.

And then you get that pop-up that says the money may not get to the person you’re sending it to for five to seven days. And I don’t think anybody understands why you’re taking my money out of my account immediately but taking a week to get it to the person I’m sending it to. And that’s very transparent to most people when they do banking.

What the instant payment network and what the RTP network does is it actually compresses it so that as quickly as the money leaves your account, it is received and is usable by the beneficiary. And that operates 24 hours a day. That experience operates 24 hours a day, seven days a week, weekends, holidays.

So if you want to move money instantaneously and you use the RTP rails, then the money will actually be received by the beneficiary instantaneously. The other thing, there are some capabilities that the network provides that are really important. So when you send the money, again, it clears and settles in seconds instantaneously.

You also get assured delivery. So when you get that confirmation back that says the money’s been delivered and the transaction’s been settled, you actually know that the person you sent it to now has it in their hands and can actually use that money no matter what time of the day it is. You’ll also get a message if for some reason that transaction cannot be settled.

And I often use the example of some businesses. I had a business sit with me on a panel a couple of years back, and I asked the member, you know, what is your experience with the existing payment rails? And his response was, you know, they work well when they work. And what he was referring to is that problem where you have no transparency if something goes wrong.

So you have to take it on faith that the payment that you made is actually going to get to the other party. With the RTP network, if for any reason whatsoever that payment can’t be made, you’ll get an instant notification back that says we couldn’t complete this transaction and here’s why. And to businesses in particular, that is incredibly important that they know that a payment’s been made.

It’s also equally important to consumers. If you’re making that payment of your electric bill or your phone bill at the last minute, you want to know that it’s actually gotten there and that it didn’t get dropped anywhere along the way. So those things are extremely important, and those are characteristics of the network that really make it different and solve real problems for businesses and consumers.

Yeah, and I think that’s really interesting. And I want to just come back and touch on something because you mentioned that there are people who are offering what looks like real-time payment type of solutions, obviously not actually moving the money instantaneously. Are those financial institutions absorbing the risk associated with that from a customer facing standpoint of saying, you know, we treat this payment as instant, but we know that it will take a couple of days to move it? Who actually absorbs the risk in that type of equation when there’s not actually a real-time payment taking place? Well, in many of the consumer applications, it is the banks who are taking on that risk that the payment can’t be settled and something will go wrong.

However, in the business environment, you’ll find that in some instances the businesses are actually taking the risk if a payment doesn’t settle. But you are correct. The difference between settling it over multiple days when you’ve actually allowed the money to, given the money to the beneficiary party, it does incur risk.

And what the RTP network has done, these instant payment networks do, is actually eliminates the counterparty risk that exists in these networks. And that’s a very real benefit to not only the banks, but also the participants. Yeah, yeah, for sure.

I’d like to switch gears a little bit and talk about kind of the broader ecosystem. Is everybody already set up to engage in real-time payments for send and receive, or is there still work that we need to do to kind of bring everybody into this ecosystem? There is definitely still work to do. Now, this is a, the RTP network is a private sector network, so we don’t carry any mandates.

And we are growing our network by providing value to the banking community. So the banks join the RTP network. We have about 550 banks on the network today, and we can reach about 67% of the households in the U.S. through the network.

But we need to build a network by adding more banks, and we are doing that every single day. And again, you do that by creating value and by adding capabilities that are valuable not only to the banks, but to their customers. But that’s how you build volume and you build scale on the network.

And again, we have been starting to see an escalation of the number of banks who are queuing up in our pipeline. There’s a lot of excitement around instant payments right now, and we’re starting to see that in the number of banks who are actually joining the network, the volume growth that we’re starting to see, the diversity of use cases that we’re seeing across the board. So we do expect that pipeline to start building up very, very quickly.

But there is still some work to be done in terms of bringing all of the banks in the U.S. on board the network. Yeah, well, I’m great to hear that people are kind of lining up to get involved because I think we are at a point where it is time for that type of action. But you do sometimes get the sense that there are still those out there for whom real-time payments is not actually a big priority.

What would you say those organizations are missing out on? Why should they be really focused on real-time payments right now? Well, let me speak about this from a bank perspective because the banks are typically our primary customers. We’re talking about infrastructure with the RTP network, right? It is the rail that clears and settles payment transactions and doing it instantaneously. And investments in infrastructure for any business out there, investments in infrastructure are usually the most difficult ones to justify.

And what you typically look at is where is the market demand for me to invest in this infrastructure? And we get that question a lot from banks. And what I’ll tell you is there is an expectation that payments will operate in real-time. The generation of consumers that have been raised with a digital experience and a mobile experience have an expectation of immediacy, instant gratification.

They don’t know the meaning of float. They don’t know the meaning of a delay in settlement. When they see a payment getting completed on their digital platform, they expect it to be done at that point in time and settled.

That is the expectation. And these individuals are now becoming the business owners in the current environment and the future. So that expectation they are carrying into their workplaces, the businesses that they build.

And we are now starting to see in the workplace in general that the digital experience, the commerce experience that everybody is seeing right now that’s instantaneous and digital is becoming the expectation that individuals have of what their banking experience should be. And that’s going to start to build up demand across the board. And if you’re a bank that’s not making the investment in real-time payments today, and the bank down the street, your competitor, is offering that service, what we have been seeing in very real terms are individuals speaking with their feet, right? Actually taking their business and moving it from one bank to the other because the banks are not offering them the capability to get an instant payout when they are finished their shift as a driver or getting early access to their wages.

So those are the kinds of things that become the expectations your customers have of you. And if you can’t provide that, then you’re going to be out of luck because you’re going to start to see customers leave. And that’s been a driving force between many banks coming on board of late.

Yeah. And I think the crucial word there again is expectation, right? This is what customers expect. And we all know how quickly customer expectations can shift.

And once somebody is able to offer a new type of service or service at a different speed, whatever that service may be, I mean, if you think about how quickly we expect packages to arrive now, if I order something online, I generally expect it to show up within two days, maybe within a week. But the idea that you could wait two weeks for a package now, that expectation is no longer something that most people have. And so when it comes to money as well, as we kind of look at the future, as soon as those expectations shift and they’re going to shift quickly and there won’t really be any chance to come back from that.

So we are approaching the end of our time here. And I want to end by just zooming way out and asking two questions. When will we have 100 percent coverage of banks using instant payments? And maybe more importantly, what does the world look like when that happens? What does our society actually and our banking ecosystem actually look like there? So I always like to look in the crystal ball.

It’s always fun to think about what the future will be, especially as somebody who’s been in payments for a really long time. And two things I would say. First, you tend to see a slow burn when you’re starting to build out a new platform.

That’s going to be the case. It was always the case in banking. It was the last time we launched the HCH network almost 45 years ago.

But you do reach that tipping point relatively quickly. And what we are starting to see is our pipeline building up, the demand starting to build up, customer expectations starting to firm up out there. So I do think you’re going to start to see a rapid acceleration of banks joining these networks and providing instant payment capabilities.

I’d like to say that we will get to virtual ubiquity within the next two to three years. That’s both an expectation of mine as well as a hope in terms of what we want to see the banks doing. I would think that we would really get that critical mass or that scale of banks adopting RTP over the course of the next two to three years.

And what is that going to enable? One thing that we’ve never done in the payments industry and in banking, we never, you know, wind up. We always add more payment capabilities. We never displace any because you never have new payment capability that’s so functional that it can actually replace some of the existing legacy applications that are out there.

So I do expect you will be able to make any type of payment for any type of use or application instantaneously over these rails. When you can reach anybody with instant payment rails, you’ll actually start to see an explosion of usage of RTP across every user community, business to business, business to consumers, consumers to each other. And most importantly, which is what I’ve called the holy grail of payments, are instant cross-border payments.

When you can start to make a payment to any country in the world instantaneously, that’s the ultimate vision of where we can potentially go. And I’ll tell you that that vision is not that far out. We’ve already tested the capability of moving transactions across borders, technical connectivity, and we have been able to clear and settle transactions cross-border in 20 seconds with some of the pilot testing that we’ve done.

So we’ve demonstrated that the technical capability is there. We obviously have some regulatory and compliance issues that we have to deal with. So we are going to have to build out business processes, but the technology is going to allow for instant cross-border payments, I think, within a reasonable period of time too.

And again, once you see that, where you can make a payment to anyone, anywhere in the globe instantaneously, that I think is the ultimate vision and going to really transform the payments industry. Yeah. No, that’s great.

I mean, certainly I think you’re right. We’re closer to that than it may seem, certainly closer to that than we’ve ever been before. And it’ll be very exciting to see what happens when this potential is realized.

So I’m afraid we have to cut it off there. But Jim, it’s been a real pleasure chatting with you. Thanks so much again for taking the time and walking us through your vision for what the world could look like with fully functional real-time payments.

Thanks, Greg. It’s been a great discussion. This show is brought to you by Alloy Labs.

As much as we love talking on the show, we believe that action is more valuable than talk. Alloy Labs is the industry leader in helping fearless bankers drive exponential growth through collaboration, exclusive partnerships, and powerful network effects that give them an unfair advantage. Learn more at AlloyLabs.com. Alloy Labs.

Banking Unbound. We are on site here at Finnova Europe 2024. So forgive us if there’s some background noise coming through, but I’m talking here with Jack Spears, UK Banking and Lending Sales Director at Tink.

Jack, thanks so much for taking the time to chat with me here. Thank you very much. Thanks for having me on.

So one of the things we want to talk about today is really, Tink has just released a report focusing on the idea of transforming lending as a response to the cost of living crisis. Fascinating report that we’ll make available to all of our listeners here. Can you start by just kind of talking broadly through how the cost of living is connected to the lending ecosystem? And I know there’s two sides of this equation.

So we’ll approach it kind of from the consumer side first, and then we’ll switch over to the bank and lender side. Yeah, not a problem. I think, you know, if you’re talking about a European context, and in the talk that I’ve just delivered, you know, we were looking at a lot of the macro environment and how that really impacts upon that two-sided ecosystem that you’ve just outlined.

So we’ve got persistent high inflation. And then as a result of that, central banks are raising interest rates to combat that. You know, that’s down to lots of factors, geopolitical and otherwise.

And really, you know, how does that affect the borrowing ecosystem and borrowers? And then what are lenders doing to combat that? So I think we’ll take it side by side, right? So you’ve got a situation whereby people are coming off fixed mortgages and they’re finding that they’re spending an extra two, three, five hundred pounds on their mortgage. And wage inflation has struggled to keep up with that. So really what we’ve got over the last couple of years is a squeezing of people’s standards of living.

And our report sort of outlined that in the fact that just under a third of UK respondents that we looked at were stating that they were running out of money before the end of the month. That was the same across Europe in terms of like, you know, the kind of broad numbers that were struggling. And what you’ve got now is you’ve got people going into the lending market, not only to service things that they would like to have, they’re going into the lending market to service everyday spending.

So 25% of respondents saying they were returning to debt just to service their everyday needs. That might be bills or what have you. Now, that is quite shocking.

And what that does is it really affects the lending side of the ecosystem. So 58% of our lenders surveyed said that they were seeing a greater number of rejected applications. Now, that might be for two reasons, right? They might have kept their lending criteria the same.

And then because people’s standard of living is squeezed, they’re falling out and they’ve got a lower cohort of customers. Or as a result of the higher risks in the market, they might have tightened their lending policies. So they’re finding that actually their cohorts that they can lend to are lower.

And then the other factor is a really interesting stat that came out is 10% of UK respondents actually admitted to underreporting their expenditure or overstating their income on a credit application. So over three quarters of lenders said that fraud risks in loan applications were higher due to the cost of living crisis. So now you can start to see, right, how does that macro environment affect me as somebody wanting to get a loan? But then how does it affect a bank or a lender trying to make money in that market? So, yeah, it’s quite a nuanced piece, really.

Yeah, well, and certainly I think the report has a lot more information that we can get into now. But broadly speaking, where do banks and lenders need help in dealing with this shifting landscape? Because obviously there are some existing traditional methods that are out there. But where are those missing the mark when it comes to dealing with and factoring in some of these new pieces? So I think it’s important to mention that banks and lenders, some banks have been lending to people for hundreds and hundreds of years, right? They’ve got a model that works.

So what we’re not saying is they need to rip everything out and replace it with, say, affordability using bank data. But there are areas in which we believe that you can kind of find those marginal gains, right? So traditional methods of affordability assessments come with a couple of obstacles. And I’ll go into them in a bit of detail.

But for one, they rely heavily on the applicant’s manual input of data or market estimates of spending. Now, for anyone that’s ever applied for a mortgage, I recently had to get a new mortgage. And I know, I wish the interest rates were kinder to me.

But there you go. One of the questions was, how much have I spent on average on groceries over the last six months? Now, I’m not sure if you can answer that question, but I certainly didn’t have that top of mind. No, I think I was struggling to even come up with an estimate, quite frankly.

And honestly, if I was confronted with that data, it might be shocking to me when I see exactly how much actually goes out the door. Exactly, exactly. So yeah, I mean, joking aside, it’s prone to human error.

So people might not be necessarily understating their spend. They might just not know. And they take a pun.

Or there’s the market averages, right? So if I’m applying for a mortgage, I might actually spend a lot less than Joe blogs down the street because actually I’m trying to be fiscally responsible because I’m applying for a mortgage. However, if those averages are used, could I then be rejected for a loan or a mortgage as a result of a block or standard process being put in there? Now, there’s a couple of problems really like that, that leads to. So there’s that one, but then there’s also what we’ve said about the fraud risk.

So people are actually actively, you know, changing their data in order to assess a loan because they need that money, not because they want to buy, you know, a nice new watch or something like that. They need it to pay the rent. They need it to buy food shopping, you know? So what you’ve got is a situation where lenders have to be really cautious.

So 35% of them actually came back to us and said, yes, we are seeing more edited applications. So on the one side it’s being seen by lenders and even, you know, customers are admitting to it on the other. Yeah, no, fascinating.

So let’s talk about Tink specifically, because obviously you’re coming here to talk about some of the new pieces that Tink is unveiling to kind of help banks plug some of these holes and deal with some of these changes. What can you tell us about what’s coming down the pipeline? So, yeah, I think the lending side of what Tink does is certainly an area of focus for us and one that we’ve invested in heavily and we’ll continue to do so. Being owned by Visa certainly helps in terms of, you know, having that long runway.

And really being able to double down on that product development side of things. So really, if you look at our risk and lending products specifically, we mainly focus on what I call, can you lend to that individual? So looking at someone’s income and then looking at their expenditure to look at an affordability assessment. And then we also look at risky spending patterns, which is what we call or what I deem, should we lend to that individual? So really that’s the kind of broad brush areas that we’re looking at.

I guess, to be honest with you, like where we’re focusing our energy and attention is really kind of fine tuning those models and working with our bank partners to make sure that we’re giving them that uptick in ROI for the products. Are you finding that the banks that you’re working with are generally pretty willing to be open and share with you? Because I know sometimes financial institutions are somewhat guarded when it comes to these kind of more sensitive questions. But obviously the more they can share with you, the more you’re able to kind of help them out.

What’s the mentality that you’re seeing from the financial institutions that you’re working with? Yeah, I think, you know, I mentioned Visa before and, you know, Visa have a partnership in one way, shape or form with pretty much every bank or lender out there. And given that we’re a hundred percent owned by them, I think, you know, that’s certainly, I’ve seen that shift in my time at Tink where we are part of Visa, we are a Visa solution. Therefore we are given, I would believe a greater degree of trust, right? And there’s already a contractual relationship between Visa and the bank.

We’re covered under that sort of umbrella. So generally what you tend to find is that they’re pretty open. What we can also do for customers is the test, right? So they can send us a load of data, anonymized data, and then we can return to them what we deem to be the income on those assessments or the expenditure, right? And then they can test that against their models.

So it’s not about saying we can do it. We can show them we can do it. And that certainly tends to kind of engender a bit of trust in that relationship.

Yeah, no, absolutely. I want to switch gears a little bit because one other really interesting thing that I noticed in that white paper was how many users, end users, customers are willing to share their spending habits with their lender if it improves the application process. On the one hand, it seems like anything we could do to kind of improve the lending process is obviously better, right? There’s clearly some pain points around there, but what do you make of that? And more importantly, why is that significant when it comes to what you’re trying to do at Tink? Yeah, so I think, you know, we’re really kind of happy in terms of, you know, the intent for people to share their information.

You know, you’re always told don’t click links in emails and be very mistrustful of anybody asking for your data. So there’s that kind of embedded, baked in fear of sharing anything with somebody that you don’t necessarily know. So we can understand that in some aspects, people don’t want to share their data.

It depends on the use case, right? So from a lending point of view, people, if they are offered a carrot on the front end, generally they’re more inclined to share that data. So that might be, hey, if you share your, you know, income with us, we might be able to give you a better rate on that loan. Or you might stand a better chance of, you know, getting an application accepted from our point of view.

What we will, so Tink is not necessarily a consumer facing brand. So really, what I’m looking forward to is getting to a point where, you know, open banking is not really a word that is being used because I think a lot of that is about the kind of education side of things. And we work really hard on the CX and the UX, really building that customer up to understand what it is they’re sharing, why they’re sharing and who the partner is that they’re sharing it with.

Right? So I think a lot of this can be overcome in that customer journey in the buildup. Obviously, if you’re asked to share your data and you get no prompts, that’s going to result in quite a lot of drop off. And we work really, really hard with our partners to do CX reviews.

And we’ve got a department in our business that look at optimizing copy and things like that to make sure that the end-to-end success rates are as high as possible. Yeah. I like that you’re talking about it from the standpoint of kind of offering a carrot at the beginning of the process because one of the things, you know, obviously a lot of lending processes are, this is well documented, how cumbersome they are.

And so some consumers might honestly perceive the carrot as simply being, I’m no longer getting hit with sticks. Like it’s actually less of a pain to go through this. And I feel like this is one of those things where if you work in the space, you know, every time one of my friends goes through a mortgage process, I hear about it.

How come, you know, this is so lengthy? How come this information is so difficult to get? How come I’ve already submitted these documents and now need to submit these others? So the idea that you can do things to streamline that process and alleviate some of that pain is potentially really powerful. And it’s not surprising that customers are now kind of looking at this maybe away from sort of the open banking terminology and just thinking to themselves, well, here’s a way that I can just speed through this, get to the end result faster. And I get, potentially even, a more desirable end result.

Not even just about the process, but where you end up could be a real… Yeah, I mean, this is kind of a big part of the study as well. And if you download it afterwards, you’ll see that the biggest area of drop-off you see in a credit application is where the bank or lender needs to ask for additional information from you. Right? A lot of the time, that’s a manual process.

Like, hey, can you give me six months worth of bank statements, please? Can you upload them to this portal? Now, in that scenario, if you’re given the choice, hey, you can either upload six months of bank statements or you can connect your bank account here and have it done in the next 30 seconds, right? Yeah. Pretty tempting. Exactly.

So it’s not just about credit risk. It’s not just about, you know, what carrot you can put at the front of it. Sometimes it’s just down to, is it easier for the customer to do it? You know, we live in an instant gratification society.

You can get a Tesco whoosh delivery in 20 minutes to my house. You can buy something on Amazon and it arrives in the same day. You know, so people don’t take kindly to friction in the journey.

They expect things now. Yeah, absolutely. And why shouldn’t they? I want to end with everybody’s favorite topic.

You know, a lot of people this week on site here have been talking about regulations around affordability assessments, regulations in general. Obviously, it’s come up in the white paper as well. A whopping 88% of UK lenders are saying they’re either seeing stricter regulations right now or expect to see stricter regulations over the next year.

This is something which, again, it’s probably good for the industry as a whole, but it can certainly lead to some pain points. How do Tink’s solutions help ease that burden on lenders in the face of changing regulations, particularly when there’s this sense of uncertainty that we don’t exactly know what’s coming? Yeah, so I think, you know, if you’re talking about the European landscape and the UK, you’ve got the UK’s Consumer Duty Act and then the Consumer Credit Directive 2. And what those aim to do is emphasise the importance on a thorough creditworthiness evaluation. And what does that mean? Well, what they’re trying to do is reduce the risk of consumers taking out unaffordable loans.

Now, obviously the lender wants to have the customer at the centre of everything they do. And from a credit risk perspective, they don’t want to lend to people that can’t afford to lend to them. So I think, all in all, it’s very good for the industry and for the customer.

But it does place a burden on those lenders to collect lots of information and be very, very certain about what it is that that customer’s financial situation looks like. So, as I said before, we’re not asking or suggesting that banks rip out any other processes. All we’re saying is that utilising bank data that we can enrich for them to give them the granularity of information they need means that they can either lend to a wider cohort, so maybe customers that they don’t consider lending to at the moment, or they can basically just layer that over the top of their traditional credit models.

We believe that those two things in comparison give an understanding of a customer’s affordability and a much more, like I say, a much more granular level. We can go down to income streams not just from wages, but we can go into income streams from pensions, investments, cash inflows, so, you know, talking gig economy or customers with a regular income. It gives a trend line as well, so we can give data going back over a year rather than those three months worth of bank statements that you might be asked for or pay slips.

So really, you can see trends in time, you can see gaps in employment. It just gives that lender much more granularity to make sure that they’re not lending to somebody that can’t afford that loan. Yeah, and really, at the end of the day, that’s what the regulators are trying to prevent as well.

And so if you look at it from that standpoint, we’re all kind of in it together. But it’s obviously an uncertain environment right now, and there’s continued uncertainty from any number of areas. I really appreciate you taking the time to connect with me.

And again, anybody listening, I would encourage you to read the white paper. You can download it at the link in the episode description. I’ve been talking to Jack Spears of Tink.

Jack, thanks so much for joining us here at Fintech Europe and for joining me on the podcast. Thank you very much, Greg. Cheers.

That’s it for another week of the world’s number one Fintech podcast and radio show, Breaking Banks. This episode was produced by our U.S.-based production team, including producer Lisbeth Severins, audio engineer Kevin Hirsham, with social media support from Carlo Navarro and Sylvie Johnson. If you like this episode, don’t forget to tweet it out or post it on your favorite social media or leave us a five-star review on iTunes, Google Podcasts, Facebook, or wherever it is that you listen to our show.

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