Real-time data sharing is better to protect consumers from using one payday loan to pay off another
Equifax urges industry-wide collaboration to meet FCA and CMA expectations for real-time data sharing
Leading consumer indebtedness insights expert, Equifax, is urging the short-term lending sector to accelerate plans to share customer data. The Competition and Markets Authority (CMA) last week published its report on payday lending including recommending the development of real-time data sharing to help new entrants better assess credit risks. The Financial Conduct Authority’s (FCA) November deadline for greater real-time data sharing is also fast approaching.
Craig Tebbutt, head of alternative lending at Equifax said: “The FCA said in its July report that effective real-time data sharing with credit reference agencies is needed to address the issue of consumers running multiple short-term loans that they cannot afford from different lenders. Last week’s CMA report further endorsed the need for real-time data sharing.
“We believe that the only real way to ensure that individuals do not get into a spiral of debt – using one loan to pay off another – is the real-time sharing of key information over the entire credit cycle. This includes account openings, account management and account closure. We also believe that real-time should mean exactly that – data should be shared by and made available to other lenders within 60-90 seconds of any key milestone in the credit lifecycle.
The recently launched Equifax Real-time Exchange has been developed in partnership with Lending Metrics, the short-term lending and real-time data specialist, to help the short-term credit sector meet the FCA’s requirements. Unlike other systems that update hourly or daily, it enables the sharing of data in genuine real-time and will provide greater predictive capability for short-term lending decisions, helping providers across the sector to extend credit more responsibly.
Equifax believe that the Equifax Real-time Exchange can encourage comprehensive data sharing within the sector, helping enable all lenders to deliver better outcomes for consumers.”
