March 3, 2021
If you can find a path with no obstacles,
it probably doesn’t lead anywhere.
~ Frank Clark
It’s a rough time to be a consumer who needs a loan. But on the flip side, it’s also a rocky time to be a lender who is afraid to offer it. The economic dilemma unfolds – – For lenders, it comes down to who is a good bet to pay us back – – For consumers, can they really pay it back? For both entities with financial futures in a turmoil, and without a crystal ball, the bottom line revolves around unraveling the dizzying, financial puzzle using divergent, smart thinking to accommodates today’s economic uncertainties.
It’s safe to say there are few winners in today’s economic crisis; lenders are in a precarious position, using past calculations for lending money may not work today. Currently, unemployment over 10%, one in five American workers unable to find work and 18% of workers taking part-time jobs below their skill level just to make ends meet as reported by the Washington Post. According to the Associated Press, over 10 million jobs may have been permanently eliminated leaving workers jobless and looking to develop fresh skills in an altered work environment.
Unfortunately, the people who really need loans won’t qualify for reasonable interest rates and will have to rely on the government’s stimulus programs or consider payday lenders who charge soaring interest rates.
Imagine all the people who have outstanding auto loans and the banks who funded $1.19 trillion in debt. If you think banks are invulnerable to bankruptcy, think again; the big banks are increasing its loss-absorbing reserves by billions of dollars as a safety net against defaults. The New York Federal Reserve reported US household debt, including mortgages, at a mind blowing $14 trillion last year, exceeding the 2008 peak by $1.5 trillion. Banks are worried that unemployment and poor spending habits of the younger generation will push credit card debt to new highs.
Bankers and lenders making incorrect lending decisions, based on fragile assumptions and outdated forecasting formulas, are fearful of accumulating unmanageable debt. Shawn Princell, CEO of RIBBIT, announces a significantly more accurate method using smart, analytical bank data that will propel loan predictability to a new level. This advanced technology relies on bank transaction data by turning banking attributes of consumers into evaluated intelligence for assessing risk and making loans. This insightful information, as an adjunct to the lender’s accumulated consumer credit history, will help protect lenders from adverse lending decisions.
Mark Begor, CEO of Equifax, states – while credit reports remain a strong indicator of credit history and past financial reliability, COVID-19 has brought the power of alternative data – – information not included in traditional credit reports like consumer consented utility and telecom payment information, income and employment data, and online bank transaction data – – into even sharper focus. Definitely a divergent and strong statement from a powerhouse of credit information.
The team at RIBBIT believes it has created the missing puzzle piece to aid lending institutions and to benefit consumers.
Failure is not fatal, but failure to change might be ~ John Wooden
Have you ever noticed how some criticism can play havoc with your hearing and scrambles your brain? Words are suddenly hard to decipher and the ego is instantly drawing up offensive plays to counter act the severe disapproval. It becomes almost impossible to achieve a workable solution when one party is on the attack while the other is strategizing a bloody coup d’état.
Be curious always! For knowledge will not acquire you; you must acquire it ~ anonymous
Come on, don’t judge me based on a few of my personal traits, it’s just not fair, rather look at the whole me, then decide if I am worthy. And if you are evaluating my credit worthiness, impacting the rest of my life, the analysis better be meticulous, expansive, insightful, and timely.
A little knowledge that acts is worth infinitely more than much knowledge that is idle – Kahlil Gibran
Open banking just got a giant goose from the President of the United States. In an executive order, President Biden strongly suggested that the Consumer Financial Protection Bureau (CFPB) endorses guidelines forcing banks to loosen their grip on consumers’ bank data. Time for banks to “give it up” to the actual account owners so they can download their banking information and share it with other banks and 3rd party service providers. Wow, this is big!