Atto’s Post

Nearly half of auto lending fraud losses result from applicants falsifying income or employment information, this is why we have seen exponential growth of auto lenders using this real time categorized banking data in their credit processes. Have a quick read where we (Atto) and our partners FICO share some valuable insights to help you. #openbanking #atto

Is the bi-weekly paycheck on the verge of disruption? With earned wage access (EWA) programs growing in popularity, it may be. EWA allows employees to access their wages as they earn them, potentially offering much-needed relief to the over 60% of Americans living paycheck-to-paycheck. CloudPay vice president, Borja Perez Valcabado, recently talked to Fortune about the benefits, regulatory hurdles, and hopes for wider access in the future. Interested in learning more about EWA, give CloudPay a follow and read the article here: https://lnkd.in/e7D7vWQV

Gave the CFPB's proposed earned wage access interpretative rule another read & have some initial thoughts: On the one hand, to quote my friend and podcast partner Alex Johnson, "tipping in fintech is complete bullshit." Having started my financial services career by working at two payday lenders, I've seen the never-ending mutations small-dollar lenders have gone through, some more or less ethical, to evade regulation: "rent-a-bank" schemes in the 1990s, then tribal payday loans and offshore lenders, the transition from payday to state-licensed high-APR installment loans and lines of credit, the RE-EMERGENCE of "rent-a-bank" in the fintech era, and, yes, "free" advances with "tips," "donations," and expedited funding fees. But - and there is a but here - regulation, like that proposed by the CFPB, typically only address the SUPPLY SIDE and does nothing to attenuate consumer demand for small-dollar, short-term credit. I realize regulators' tools to impact demand are limited, but constraining supply without addressing demand creates the regulatory "whack-a-mole" we've been in for better part of three decades, if not longer. It's also important to recognize there are a range of products consumers use for short-term liquidity, and some are empirically "better" (less expense, stronger protections) than others: EWA, particularly employer-integrated, even with an expedite fee, is a better product than a classic payday loan or typical bank overdraft. Both major fintech trade groups, the American Fintech Council and the Financial Technology Association, expressed disappointment in the CFPB's proposed rule, while consumer advocates praised the Bureau for halting "worker payday loan evasions." The measure is almost certain to face legal challenges, especially in a post-Chevron era, and it could take years before it becomes effective -- if ever.

Agree with your take on this. The reason these products have existed for so long and still do is that there is a market / need for them. As you say, some are offered and managed in a more ethical way than others, but as I learn more about EWA I'm thinking it may be the answer the market is looking for right now. If it can be implemented and expanded in a safe, fair and ethical way, I can see it squeezing the less desirable products to the side. Then we can continue working on the problems that have made it necessary in the first place. (Though I must admit after decades of looking at the problem, I doubt anyone has a 'magic bullet' to solve for this.)

Consumer finance new business grew by 2% in January 2024. New figures released by the Finance & Leasing Association (FLA) show that consumer finance new business grew in January 2024 by 2% compared with the same month in 2023. In the twelve months to January 2024, new business was 2% lower than in the same period in 2023. The credit card and personal loans sectors together reported new business up in January by 5% compared with the same month in 2023, while the retail store and online credit sector reported new business 9% lower over the same period. Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: “The consumer finance market made a positive start to 2024 primarily driven by growth in the credit cards and personal loans sectors. “In the near term, consumer spending growth is likely to remain subdued despite an improved outlook for real household disposable incomes. The UK new consumer credit market is expected to grow by 2% in 2024 to reach almost £360 billion. “As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.” #Lending #Finance #Credit #FinancialServices

Analytics software company FICO has highlighted the impact of rising fuel costs, #inflation, and wage pressures on 💳#creditcard usage and #debt management in 2023-2024. Read more here 👉 https://buff.ly/4cLHW5q #FICO #credit #financialdata #riskmanagement #spendmanagement #spending #balance #payment #ThePaypers

Consumer finance new business grew by 2% in January 2024. New figures released by the Finance & Leasing Association (FLA) show that consumer finance new business grew in January 2024 by 2% compared with the same month in 2023. In the twelve months to January 2024, new business was 2% lower than in the same period in 2023. The credit card and personal loans sectors together reported new business up in January by 5% compared with the same month in 2023, while the retail store and online credit sector reported new business 9% lower over the same period. Commenting on the figures, Geraldine Kilkelly, Director of Research and Chief Economist at the FLA, said: “The consumer finance market made a positive start to 2024 primarily driven by growth in the credit cards and personal loans sectors. “In the near term, consumer spending growth is likely to remain subdued despite an improved outlook for real household disposable incomes. The UK new consumer credit market is expected to grow by 2% in 2024 to reach almost £360 billion. “As always, customers who are worried about meeting payments should speak to their lender as soon as possible to find a solution.” #Lending #Finance #Credit #FinancialServices

The Union Budget 2024-25 announced several measures to support the growth and competitiveness of Micro, Small and Medium Enterprises (MSMEs) in India: 1. A new credit guarantee scheme to facilitate term loans for MSMEs to purchase machinery and equipment without requiring collateral or third-party guarantees. The scheme will operate by pooling the credit risks of these MSMEs, with a separately constituted self-financing guarantee fund providing each applicant with guarantee coverage of up to ₹100 crore[1][2][3]. 2. Public Sector Banks (PSBs) will build their in-house capability to assess MSMEs for credit based on their digital footprints, instead of relying on external assessment. This is expected to improve credit eligibility assessment for MSMEs without formal accounting systems[3][4]. 3. The limit of Mudra loans will be enhanced to ₹20 lakh from the current ₹10 lakh for entrepreneurs who have successfully repaid previous loans under the 'Tarun' category[3]. 4. A new mechanism has been proposed for facilitating continuation of bank credit to MSMEs during their stress period, supported through a guarantee from a government-promoted fund[3]. 5. SIDBI will open 24 new branches this year to expand its reach and provide direct credit to all major MSME clusters within 3 years[3]. 6. The turnover threshold of buyers for mandatory onboarding on the TReDS platform has been reduced from ₹500 crore to ₹250 crore, bringing 22 more CPSEs and 7,000 more companies onto the platform[3][4]. 7. E-Commerce Export Hubs will be set up in public-private-partnership mode to facilitate MSMEs and traditional artisans in selling their products in international markets[3][4]. These measures aim to provide easier access to credit, enhance operational efficiency, and boost the global competitiveness of the MSME sector, which contributes significantly to India's manufacturing output and exports[4]. Sources [1] Budget 2024 Highlights | Seven announcements for MSMEs https://lnkd.in/d75qKB5c [2] Budget 2024-25: Emphasis on easier credit access for MSMEs & their ... https://lnkd.in/dizYhHvy [3] What are the 8 new measures announced for MSMEs in Budget ... https://lnkd.in/dTsRxh78 [4] Union Budget gives a leg-up to MSMEs, manufacturing sector https://lnkd.in/dZsS8bVa [5] Budget 2024: Measures to boost MSMEs announced by Finance ... https://lnkd.in/dwCScdz9

📰 Earlier today it was announced that the UK economy fell into recession at the end of last year. GDP fell 0.3% in three months to December after a collapse in retail sales in run-up to Christmas as hard-pressed households cut back on spending amid the cost of living crisis 📈 Despite tough market conditions for SMEs nationwide, there are finance solutions designed to support businesses during economic downturns. From addressing cash flow constraints to facilitating debt consolidation, discover how these finance strategies can help SMEs weather the storm and emerge stronger than ever before 🚀 🔎 Learn more in our blog > https://hubs.la/Q02l94G60

Unlock the challenges and considerations financial institutions face when meeting consumers' demand for instant payments and read how one use case, Earned Wage Access, is gaining traction. #EarnedWageAccess #instantpayments #financialinstitutions