EDGE

Cashflow underwriting’s time has come. Lender profitability could be peaking: interest rates are high, delinquency rates are dropping, but borrowers are sitting on the sidelines. This WSJ article suggests that lenders could “start lending to a wider range of people” to combat this trend (while warning of potential risk). https://hubs.la/Q02Zl2W90 Now seems like the time for lenders to expand their credit box with cashflow underwriting – without increasing risk of defaults. Reminder: cashflow underwriting leverages real-time insights into a consumer's income and spending patterns. It provides lenders with a more holistic and dynamic view of a borrower’s ability to repay that is not reflected in traditional, backward-looking credit scores. Portfolio growth could be a simple proposition: our data shows a minimum 6% boost in qualified approvals with second looks alone using EDGE proprietary insights from open banking data (https://hubs.la/Q02Zl2Y00). Add inclusion for underserved borrowers — gig workers, entrepreneurs, or those with limited credit history— and you’re growing your addressable market by millions. Alternatively, you could offer better terms to applicants – armed with cashflow data you’ll be able to identify the qualified borrowers that have been put in the wrong risk bucket. Credit unions, take notice! This next year could be a huge opportunity to help your members. According to Happy Money, refinancing credit card debt into unsecured personal loans could save U.S. households over $80 billion in 2025 (https://hubs.la/Q02ZkSQG0). The question now isn’t whether lenders can afford to implement cashflow-based underwriting; it’s whether they can afford NOT to. Are you considering cashflow underwriting? What’s holding you back? Let’s discuss in the comments! 👇 #FinTech #LendingInnovation #CashflowUnderwriting #ConsumerCredit

We're proud to be featured among these other innovators in AI/ML! "EDGE integrates AI and ML across its fintech analytics platform, using traditional ML for accurate, explainable insights and GenAI for enhanced data mining. By analyzing text and time-series data at scale, EDGE accelerates the discovery of actionable insights, allowing rapid product updates tailored to customer needs. EDGE’s focus on compliance and explainability ensures its innovations meet regulatory requirements, strengthening client trust."  #creditunions #Altlending #AI #Fintech https://lnkd.in/gPDabp3u

Don't miss the next installment of our Finopotamus webinar series. We will be discussing open banking and its many implications with a panel of experts. Click below for more details and the registration link. #fintech #creditunions #openbanking

I’m a huge fan of John San Filippo and Finopotamus so this will be good ! But am a super fan of Bridger Robinson so this is a don’t miss event! #creditunions #rocking #fintech #scmsrocks

Open banking. Is it just another compliance burden? A threat to your credit union? An opportunity for your credit union? The fact is, it's all three. Open banking has the potential to create winners and losers. The good news is that the outcome for your credit union is completely within your control. In this insightful webinar coming up December 4, Finopotamus Publisher John San Filippo will discuss open banking and other related trends with Brian Reshefsky of EDGE, Amy Schade of TRIUS FEDERAL CREDIT UNION and Bridger Robinson on InTouch Credit Union. CLICK BELOW TO RESERVE YOUR PLACE TODAY! #fintech #creditunions #openbanking

Credit union members will be ramping up holiday spending, and will likely use buy now pay later (BNPL) to finance their purchases, 11% more than last year according to Adobe Analytics. CUs have until recently had very little insight into these obligations: because BNPL doesn’t affect your credit score, credit bureaus can’t tell you anything about it. BNPL is nearly ubiquitous these days, leaving a serious blind spot for CUs that want to help their members responsibly. It’s not a trivial issue: EDGE client data shows that as the number of loans a borrower takes on, they are also likely to have more BNPL loans. In addition, as borrowers pay off one BNPL purchase, they are very likely to make another, essentially using BNPL as a revolving line of credit. The good news is that EDGE and our bank transaction data can give lenders the insights they need. EDGE gives a real-time view of borrowers’ income and transaction history, and thus the number and amount of BNPL payments they are responsible for. Unlike traditional credit bureau data, bank transaction data gives a full – and current – picture of members’ financial health. With this insight, CUs can help members in a number of new ways: risk assessment when underwriting new loans, in servicing existing loads with a full view of members’ finances, or even in offering lower-interest loans to replace high-interest BNPL payments. Learn how credit unions are facing this BNPL challenge today in our upcoming online panel discussion, where EDGE’s Brian Reshefsky joined by two senior lending officers and Finopotomus’ co-founder to discuss current trends for credit unions: https://hubs.la/Q02YdHh70

The CFPB's new open banking rule creates new challenges -- and opportunities -- for credit unions. Fintechs already access CUs member data through screen scraping or APIs and now they will have even greater power. The race will be on for credit unions to utilize their own data effectively first. We've assembled a great panel to discuss: two CU senior lending officers, Amy Schade and Bridger Robinson, EDGE's own Brian Reshefsky and Finopotomus' co-founder John San Filippo. Register today to learn how CUs can prepare for open banking, what technologies they can utilize and how they can improve member care. https://lnkd.in/gjzvHEtJ

The CFPB's new open banking rule creates new challenges -- and opportunities -- for credit unions. Fintechs already access CUs member data through screen scraping or APIs and now they will have even greater power. The race will be on for credit unions to utilize their own data effectively first. We've assembled a great panel to discuss: two CU senior lending officers, Amy Schade and Bridger Robinson, EDGE's own Brian Reshefsky and Finopotomus' co-founder John San Filippo. Register today to learn how CUs can prepare for open banking, what technologies they can utilize and how they can improve member care. https://lnkd.in/gjzvHEtJ

Money20/20 may be over, but the work and innovation are just beginning. This excellent recap by Alex Johnson included this gem: "When it comes to cash flow underwriting, the key question is whether banks will be able to access their own data faster than fintech companies will be able to access (with consumer permission) the banks’ data." EDGE is actually taking a different approach than other fintechs and empowering credit unions to use their own data, giving them a huge leg up in automation in analytics. Our clients are already seeing great results: check out our upcoming panel discussion at www.stopthestip.com, which features perspectives from two CU leaders, myself and John San Filippo from Finopotomus. #Money2020 #CreditUnions #DataInnovation #Fintech #FinancialInclusion #Cashflowunderwriting #stopthestip

The CFPB’s Personal Financial Data Rights Rule (1033) is a huge step forward for open banking and cashflow underwriting. The rule promises to give consumers more transparency, safeguards, and control of their financial information. The CFPB says that another big benefit is that it gives better access to transaction data for lenders’ underwriting models. The CFPB has previously promoted cashflow underwriting, and in this new rule it says that “Industry research has shown that cash flow is predictive of serious delinquency, and that models including cash flow can distinguish between the repayment risks of consumers with similar traditional credit profiles.” Like CFPB Director Rohit Chopra recently said on Squawk Box (https://hubs.la/Q02V-_JV0) , “Those who don't necessarily have a credit score or long credit history can now use their payments and transaction information to show their creditworthiness." We agree! Open banking at the end of the day will be a win-win for lenders and consumers. The rule even says that “lenders will be able to identify and reach more consumers with low repayment risk … and may therefore experience an increase in profits.” Cashflow underwriting is clearly gaining traction in the marketplace, and it’s great to see the CFPB advance it even further forward.