Drive Exceptional Commercial Performance
Responsible Consumer Lending
Make smarter credit decisions using historic consumer financial behaviour & A.I to determine affordability.
What is Responsible Consumer & Commercial Lending?
Responsible lending is not only key to maintaining a positive brand image but is also the central pillar to driving exceptional commercial performance, through minimised credit risk.
In essence, responsible lending just means that clients are using available data to ensure customer can afford to repay their new liability.
Essentially reducing the risk of bad debt by making intelligent lending decisions upfront.
Creditworthiness & affordability are the two main cornerstones of responsible lending.
Being able to accurately calculate affordability & creditworthiness allows clients to minimise their underwriting credit risk.
Affordability centres around the consumers ability to afford a new financial liability.
_Affordability API uses AI to analyse historical consumer spending behaviour to provide a detailed analysis of whether they would be able to comfortably afford their new loan, credit card, financed purchase and so on.
Creditworthiness centres around the consumers likelihood to meet new financial commitments.
_Affordability API uses AI to analyse historical consumer payment behaviour to provide a detailed analysis of whether they have historically paid new loan, credit card, financed purchase commitments and so on.
What are the FCA compliance requirements on affordability & creditworthiness?
Do clients have to assess affordability separately from creditworthiness?
Chapter 5 of the FCAs Consumer Credit sourcebook (CONC) outlines a requirement for clients to assess the creditworthiness of a customers. This is the customer’s ability to make repayments as they fall due, covering both affordability & creditworthiness.
So in essence, no – clients should be assessing affordability in a parallel with credit worthiness.
Does the FCA define how clients should check affordability & creditworthiness.
The FCA does not clearly define how clients should check the affordability & creditworthiness of customers.
The scope of all affordability assessments should cover the type and amount of credit, alongside the customer’s financial position.
A client is required to make a ‘reasonable’ assessment of a customer’s affordability & creditworthiness, our _Affordability API automates this process and provides with with a accurate historical & present assessment.
Do I have to use a credit reference agency (CRA) to make a creditworthiness assessment?
There is absolutely no requirement for our clients to use CRAs to make creditworthiness assessments. The Mercury Enriched _Affordability API provides the most accurate representation of a customer present & historic affordability & creditworthiness.
Short Video About FCA Consumer Credit Regulations
What are some popular _Affordability API use cases?
- Consumer Lending – Automate regulatory & compliance affordability checks whilst using accurate historical financial data to reduce credit risk.
- Commercial Lending – Get an instant snapshot of commercial health and creditworthiness using historical financial data delivered by _Affordability API
- Real Estate & Housing – Instantly determine whether a client can afford new mortgage and rental commitments based on their current and historic financial health.
{
"success": true,
"message": "Affordability data",
"code": "200",
"data": {
"affordability_summary": {
"liability": 100,
"average_income": "4123.66",
"average_expenses": "2891.37",
"average_eom_balance": "1232.29",
"affordability": "PASSED",
"liability_cash_position": "1132.29",
"primary_account_check": "PASSED"
}
}
}
What is _Affordability API?
Built on top of open banking and the fastest financial rails, _Identity API provides your customers with an effortless way to securely verify their ability to afford new liabilities.
{
"customer_key": "wCx9mJ8nz1zr5AtB",
"name": "john doe",
"auth_type": "AFFORDABILITY",
"account_id": "56c7b029e0f8ec5a2334fb0ffc2ffacz",
"liability_value": 1000
}
Built for Developers. Built for Scale & Speed
We turn complex financial algorithms & infrastructure into simple API calls to save your team thousands of development hours.
Build quickly, scale effortlessly and go-to-market in days not weeks using Mercury Enriched APIs.