Last Week in Lending: Friday, 21 July

? The urgent need for more real-time creditworthiness assessments in the US

During the pandemic, credit scores rose, but now more borrowers are struggling to maintain their creditworthiness because of high inflation. According to WSJ , this has meant lenders are now monitoring borrower behavior more closely to manage potential risks.

I see this triggering a big shift in lenders using more alternative data sources in assessing creditworthiness. It doesn’t take long for credit scores from credit bureaus to become outdated, so to assess the real-time financial situation of a borrower, more lenders need to be leveraging open banking data.?

Learn more about the shift in US credit scores

?? Important takeaways from PSD2 as we shift towards PSD3

As we wait for PSD3 to come into play, some are taking the time to reflect on key learnings from the existing directive:?

• Collaboration is vital: PSD2 emphasized the importance of collaboration between traditional banks and fintech companies. Working together fosters innovation and the development of customer-centric financial solutions.
• Customer-centricity: The focus on the customer experience became paramount under PSD2. Embracing customer-centric strategies and providing enhanced services and products are essential for success in the open banking ecosystem.
• Adaptability to regulation: The financial industry must stay adaptable to evolving regulatory landscapes. Embracing changes and ensuring compliance with new regulations allows businesses to thrive in the open banking environment.
• Embracing innovation: PSD2 paved the way for enhanced competition and innovation. Financial institutions need to embrace new technologies and innovative approaches to meet customer demands to thrive in the era of open banking.

Check out the article

?? Embedded finance and bank-fintech partnerships: The focus of Money 20/20 Europe

S&P Global put together a great summary of the key themes at Money 20/20 Amsterdam:

1. Everything is embedded
2. Banks and fintechs bury the hatchet
3. The promise of generative AI

I was excited to speak on Rabobank ’s podcast at the event, giving my take on all of these topics! In particular:

• How embedded lending is opening up the B2B lending segment
• Why bank-fintech partnerships are exciting (not scary!), and?
• How AI is shaping financial services

I recommend taking a listen !?

Taktile also hosted a panel discussion at the event, where we discussed bringing B2B SME payments and financing up to speed.

Get the recap here!

?? Must listen: Deep dive into the latest US guidance on bank-fintech partnerships

The Fintech Layer Cake podcast dives deep into the recently released guidance on third-party risk management in the US. This guidance is a cornerstone of the fintech regulatory environment, defining how banks should handle their fintech partners. It’s a crucial piece of regulation that will likely shape the future of fintech partnerships – so worth taking a listen!

Listen here