Consumers have complicated banking and personal relationships. There are several scenarios that followed a complex or de-tangling theme. There were examples where the joint loan applicants have separate transactional accounts; sole applicant, shared joint account; and situations where the consumer selects specific accounts to share. The fundamental rule on Open Banking – CDR is that the consumer’s right to share their data (and with whom to share) is not a right, not an obligation). The lenders cannot make access to accounts mandatory in the loan process.
How can you understand what transactions belong to whom in joint accounts?
If the non-borrower’s income is credited to this account, can the lender use that value as confirmation or do they need to verify 2nd party directly?
How can you confirm the 2nd person’s details without invading their privacy?
Will a ratio of expense/income work across multiple owners of the transactional account?
What do you do when people will not share their data?
This is a massive challenge for lenders. What is discretionary spend, lifestyle and non-discretionary? How can the lender's group transactions? How can they translate a banking transaction to groceries vs alcohol? Should they?
How can you understand what is each person’s transactions and is the data being used to verify expenses or for risk purpose?
What expectations are there on the lender to use the expense transactions such as gambling and alcohol as addiction vs lifestyle? What about shopping? Afterpay?
What if they don’t assess those transactions? Will they be liable later?
How do they audit and capture conversations regarding transactions?
Is there a possible consistency issue?
Should each lender value the same transactions as discretionary v lifestyle?