Transactional Data

Complex

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.

Big Questions

  • 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?

Data Governance

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?

Big Questions

  • 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?