EDGE

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.

The “Small-Dollar Lending Rule” is going to hurt: our preliminary analysis of EDGE client data suggests there could be as much as 14% losses for lenders’ portfolios, depending on the product. No lender wants their portfolio to be a leaky bucket, but there's hope: our research also shows that lenders can reduce those losses to 5-10% by leveraging bank data analytics (more below). Issued by the Consumer Financial Protection Bureau (CFPB), this rule will become effective in 2025 and, among other requirements, will prohibit lenders from making a new attempt to withdraw funds from an account after two consecutive attempts have failed unless the borrower specifically authorizes another attempt. The likely result will be fewer opportunities to collect on debts, leading to fewer returns, increased defaults, and ultimately increased rates for borrowers. The bad news: conventional risk data from bureaus and similar sources can’t help. And while lenders might have pay stubs giving insight into payroll dates, that’s usually data from before funding the loan and potentially out of date. Historical paystubs also don’t account for other factors that affect account balances, such as other financial obligations coming due and general personal finances of a borrower. The good news: cashflow insights offer a more accurate, real-time, and reliable method to assess a borrower’s ability to repay and can help lenders optimize every collection attempt to more accurately predict available balances in the future. With cashflow data, lenders can see all sources of income (salary, freelance payments, government benefits, cash deposits, etc.) alongside expenses and transfers (rent, utilities, debt payments, and more). This comprehensive view enables accurate calculation of a borrower’s disposable income and capacity to meet debt obligations. That’s where EDGE’s Loan Servicing solutions (https://hubs.la/Q02S_Ss40) come in. - Risk alerts let you take proactive action when collection attempts are likely to fail - On-demand updates give real-time views into borrowers’ ability to repay - Collection timing optimization based on predicted future balances and optimal collection dates to improve the chance of successful ACHs New challenges come with changes in any industry– with the advent of the Small-Dollar Rule, lenders have an opportunity to see immediate value from cashflow analytics which are still nascent in consumer lending today. The prospect of cutting losses from failed collections by such a large amount will surely accelerate lender adoption of cashflow analytics for loan servicing. As these risk techniques gain traction, we expect lenders to embrace them at every stage of the consumer credit lifecycle; from pre-funding screening to underwriting to post-funding demands for servicing an account. #ConsumerLending #Fintech #CashflowAnalytics #LoanServicing #SmallDollarLending #CFPBRegulations #LendingInnovation #FutureOfFinance