Opening Data Responsibly
Kent Mackenzie leads Deloitte’s Risk Analytics practice and has spent over 12 years in a range of financial services roles. With a passion for FinTech, data and advanced analytics, Kent has worked with local, national and international clients to develop tech and data solutions to manage financial crime, regulatory compliance, credit risk, and collections & recoveries.
“Data, quite frankly, should be considered as the lifeblood of any form of innovation and technological development,” says Mackenzie. “It’s very pertinent in our industry, financial services, that all products and advice for consumers require a hefty analysis of data; either on a personal level based on likes, preferences, hopes, dreams and desires, or with an overlay on those products of the broader population’s needs.”
In Mackenzie’s mind, having open access to data is what really helps innovation advance quickly, specifically in financial services, because it helps provide specific information on the types of products and services that can be offered. “If we can democratise data in this space, we can open up financial services to a variety of communities that perhaps haven’t in the past had the privilege of a financial product or service,” he explains. “It can help us to educate those that perhaps need a bit more help in understanding financial products.”
Before we get to this point, however, we need to rectify the opposing forces between the desire and ambition from organisations, regulators and innovators, to democratise data and create an open playing field, versus an anxiety around data privacy, respect of data and regulatory access to data. Mackenzie maintains that while we recognise the need to provide access, we need to do so respectfully and within the confines of respecting privacy, data integrity and bias. Over the past five years, he believes regulators within the UK have been doing a great job of opening up safe sandboxes, and credits the open data movements that have created anonymised data that is meaningful and can be accessed safely. He underscores that all this needs to be done in a non-competitive manner. “There’s a higher calling here to create these types of safe spaces to play,” says Mackenzie.
He believes the next incarnation of open data is eventually about providing a complete life-view of how one’s finances may be structured and how people could be guided and remain financially literate along their journey. This chain of events will prompt major innovations within the traditional financial services sphere. For example, real estate businesses can provide a number of add-on services around things such as affordability, insurance and tax standing.
The most important guiding principle of open finance, Mackenzie maintains, is the huge opportunity to level the playing field. “Fundamentally, financial services are a basic human right, and there are some staggering facts whereby large parts of the population do not have access to that basic human right,” he emphasises. “Also, I think that the ability to blend finance into our everyday lives is really exciting. It will create a really good opportunity to have financial services writ large.”
Opmodal
DirectID and LendInvest to Streamline Credit Decisions
A new partnership between Scottish fintechs DirectID and LendInvest is set to reshape the landscape of property finance. The two companies have teamed up to introduce a new era of streamlined credit decisions. The fusion of cutting-edge technology from DirectID and the visionary approach of LendInvest will bring unprecedented efficiency and effectiveness to the way credit decisions are made in property finance.
Gone are the days of cumbersome, time-consuming credit assessments that often slows down property financing. With DirectID and LendInvest a transformation is underway. This collaboration promises to not only expedite the credit decision process but also enhance its accuracy and reliability.
DirectID’s Technology
At the core of this collaboration lies DirectID’s state-of-the-art technology, which harnesses the power of data to provide deep insights into an applicant’s financial profile. Through advanced data analytics, DirectID paints a comprehensive picture of an individual’s financial behavior, offering lenders a holistic view that extends beyond traditional credit scoring. This multifaceted perspective enables lenders to make more informed decisions, minimizing risks while opening doors for potential borrowers.
LendInvest’s Visionary Approach
Complementing DirectID’s technological prowess is LendInvest’s forward-thinking approach to property finance. Known for their innovation and agility, LendInvest has consistently sought ways to challenge the status quo and simplify processes within the industry. This collaboration aligns seamlessly with LendInvest’s commitment to providing a seamless borrowing experience. By incorporating DirectID’s insights, LendInvest aims to further enhance their ability to cater to the unique needs of borrowers in the property finance market.
A Symbiotic Partnership
The synergy between DirectID and LendInvest is undeniable. Both entities share a common goal: to make property finance more accessible, efficient, and secure. By leveraging DirectID’s cutting-edge technology, LendInvest can fast track their credit evaluation process while maintaining the highest standards of risk assessment. Borrowers can look forward to a smoother journey, marked by quicker decisions and a higher level of transparency.
How Open Finance is revolutionising lending
Season 3, episode 9
Listen to the full episode here.
Lending money is a process that has long been around and for many years it was left undisrupted. People are very familiar now with credit scores and the idea that to get credit you need credit.
New solutions and technologies are coming to disrupt this market to make financial products more accessible to a greater number of people.
In this episode we’ll look at how Open Finance is changing the status quo and look at some fantastic examples of fintech innovation.
We’ll also look at how credit bureaus are adapting and partnering with fintechs to evolve their own models.
Guests:
Robert McKechnie – Head of Products at Equifax
Crawford Taylor – CEO and Founder at Nude
DirectID and Zinia AI partner to assist with regulatory compliance in lending
The collaboration between DirectID and Zinia AI propels lenders towards an unprecedented realm, where flawless compliance and unrivaled personalisation coexist seamlessly.
In the rapidly evolving digital landscape of today, discerning customers yearn for bespoke financial encounters tailored precisely to their distinct requirements. Through DirectID’s cutting-edge open banking service, lenders gain direct access to real-time financial data, emboldening them to truly apprehend their customers’ financial patterns, inclinations, and capabilities. This wealth of information serves as the bedrock for lending decisions that transcend boundaries, ushering in an era of hyper-personalized experiences that foster unparalleled satisfaction and unwavering loyalty.
Armed with Zinia’s visionary decisioning algorithms, lenders can automate, refine, and imbue hyper-personalised journeys within the lending process, birthing superlative outcomes that captivate customers. Zinia’s formidable technology empowers lenders to make precise, consistent, and equitable lending determinations, taking into account an expansive array of factors, encompassing affordability, risk tolerance, and suitability.
In an era of transformative shifts in consumer obligations within the lending industry, the alliance between DirectID and Zinia emerges as a paradigm-shifting game-changer. Together, we embrace the opportunity to shape the future of lending, equipping lenders with the ability to deliver unparalleled personalisation on a grand scale, surpassing even the loftiest of regulatory benchmarks.
If you are a lender driven to carve your own distinct identity in the market and surge ahead of the competition, we implore you to embark upon an exploration of the profound possibilities that lie within the DirectID-Zinia AI partnership. Connect with us today to unlock a treasure trove of insights into how we can empower you to drive hyper-personalised outcomes that will leave an indelible mark.
Standards for Innovation: Mapping the global financial landscape in Open Banking
The expansion of Open Banking across the globe has led to a burst of innovation within financial products, leading to improved customer money management where consumers give access, and consent to their data being used. The opportunities to transform the economy and society are even greater with more countries embracing Open Finance and putting in place a secure data-sharing infrastructure across multiple industries and not just banking.
With Open Banking initiatives gaining momentum around the world, a range of different standards are emerging. Smart Data Foundry and Ozone API have collaborated to develop the Standards Library and Innovation Atlas, outlining the features and similarities between different standards being set across the globe. Beyond a general desire to drive innovative outcomes, not all standards are designed with the same intentions in mind. As nations look to allow API access to customer-consented data, it’s clear that the main drivers may differ, from competition and inclusion to stability or innovation.
For the UK, with its ground-breaking Open Banking Standard, increasing competition was key. The Competition and Markets Authority’s (CMA) 2016 report found that big banks dominated the market and wanted consumers to benefit from introducing other players. Has the mandating of Open Banking worked to achieve this in the UK? The FCA reported in 2022 that large banks’ historic advantages were starting to weaken, in part due to digital innovation.
As well as increasing competition, Open Banking’s other advantages are consumer based- such as increasing the ease of charitable spending and financial decision-making.
So how do the main objectives of other standards vary?
Countries with financial inclusion in mind in their Open Banking regimes, such as Brazil, Mexico or Indonesia, look to embrace a broader scope of data exchange and invite new participants into the regime to ensure a greater diversity of products and services for the financially vulnerable.
From the outset, Banco Central do Brasil’s goals aimed for a more inclusive and competitive business environment’, highlighting the promotion of financial citizenship as one of their four objectives. Also listed were encouraging innovation, promoting competition and increasing the efficiency of the National Financial System and the Brazilian Payment System. From the outset, a broad range of products were included in their standards to tackle these objectives.
The Open Banking move for India was part of a bigger infrastructure build called India Stack, encapsulating a digital identity infrastructure, a digital documents system, a payments system (UPI) and the account aggregator framework. This was part of a massive digital overhaul of the management of the economy, with paperwork dominant, to address financial inclusion. Cross-border interoperability, particularly for remittance payments, is another target being addressed by the nation.
Financial access is a top priority in Mexico for the government, whose Fintech Law was enacted in 2018. However, regulated Open Banking is not yet a reality, but with a FinTech ecosystem growing rapidly and it being a hotbed of software engineering talent, Mexico will be one to watch when Open Banking does come into force.
Finally, in the Kingdom of Saudi Arabia, Open Banking has been driven as a pillar of the ambitious vision for Saudi 2030. Open Banking and Open Finance are key enablers in transforming the financial services sector, economy, and society.
As Open Banking standard frameworks are developed globally, it allows for innovative products to spread across borders. Smart Data Foundry’s aizle synthetic data engine looks to drive innovation and produces Open Banking compliant synthetic data. Ozone API provides compliant open API technology to monetize Open Banking globally. The global environment for applying APIs and synthetic data can be understood with Standards for Innovation.
Learn more about the global financial landscape by exploring Smart Data Foundry’s”¯Standards for Innovation.
Written by Magdalena Getler and Lucy Lloyd (Smart Data Foundry), Huw Davies, Chris Michael (Ozone API)
DirectID and Smoothpay to provide stable income to freelancers
Scottish fintech, DirectID, the global credit and risk platform, has recently formed a strategic partnership with Smoothpay, a fintech startup that converts unpredictable income into a dependable paycheck. By leveraging DirectID’s open banking platform, Smoothpay will now offer freelancers, contractors, and small business owners a reliable monthly income.
Smoothpay’s solution aims to remove the anxiety associated with erratic pay schedules, enabling people to pursue the flexible work they desire. By utilising real-time and historical income data through open banking, Smoothpay guarantees gig economy workers a level of certainty, ensuring a consistent income stream.
DirectID’s income verification tool, powered by open banking, is utilised to evaluate the earnings of small business owners and freelancers. Once users undergo a quick 30-second connectivity process, Smoothpay can rapidly analyse up to a year’s worth of customer earnings. As a result, individuals can promptly sign up for the service and start receiving their “Smoothpay” without any delay.
Henry Oakes, Founder of Smoothpay, said:
Reliable income analysis is at the heart of Smoothpay, but so too is a smooth (ahem) and trustworthy customer experience. We wanted our customers to find out their Smoothpay within a minute or so of signing up – and we’ve managed to achieve this with minimal fuss by integrating DirectID into the app.
Clare McCaffery, Chief Commercial Officer, DirectID, said:
When I first heard about Smoothpay, I instantly understood the role open banking could play in helping freelancers earn a stable income. Our mission has always been to promote financial inclusion ”“ that means to help people access the products they need, and help the providers to provide them. The world of work has transformed in recent years, and this is an incredible opportunity to use open banking to support those without a traditional salary for the first time.
UK Fintech Week special – a chat on synthetic data with Smart Data Foundry
Season 3, episode 6
Listen to the full episode here.
In this special episode with speak with David Tracy, Head of Data Science, at Smart Data Foundry on the week they presented their new Aisle proposition at Innovate Finance Global Summit.
What is synthetic data is? How is it different from real-world data?
We’ll explore how it will speed up innovation and collaboration in the fintech world, what the risks and benefits are and much more.
David will also speak to us about the work they’ve done with the FCA and the PSR to tackle APP fraud using Agent Based Simulation.
Fintechs DirectID and Faciit partner to make accessing credit easier
DirectID, the global credit and risk platform for risk managers, has announced a partnership with Faciit, an alternative lending solution for individuals without a UK credit history. This partnership utilises DirectID’s open banking insights to assist people with new-to-country status in accessing affordable credit.
Faciit’s save-to-borrow solution operates by requiring users to save one-third of their loan requirements for a minimum of three months. Following this, Faciit provides the remaining two-thirds as competitive loans. Faciit distinguishes itself from traditional lenders by not relying solely on bureau data to make credit decisions. Instead, the company employs DirectID’s income verification, using open banking data to determine whether an individual can afford to repay the loan.
James Varga, CEO & Founder of DirectID, said:
We’re delighted to partner with Faciit to help new-to-country individuals access affordable credit using DirectID’s open banking-powered insights. The partnership is perfectly placed alongside our mission to promote financial inclusion and responsible lending practices. By using open banking, we can enable better access to financial services for everyone, regardless of their credit history or financial status.
The partnership between DirectID and Faciit is rooted in their shared mission to promote financial inclusion. Faciit aims to provide new-to-country status individuals with the loans they need to achieve their financial goals, while DirectID believes everyone should have access to the financial services they need.
Olaolu Olaleye, CEO & Founder of Faciit said:
Our name Faciit means we facilitate it, and it sums up our mission to help create financial possibilities for those who will struggle otherwise. We are excited to partner with DirectID to deliver our complimentary missions of enabling financial inclusion.