Finicity’s Combating the Emerging COVID Credit Crisis report was used by The Financial Brand as it described how banks and credit unions can prepare to serve their customers in a recession unlike any they have seen.
You can read the full article at The Financial Brand.
Using Finicity’s survey report data, you can read about the impact of Covid-19 on consumers and their credit. Many have experienced a financial blow, and expect to be reeling from the consequences for the foreseeable future.
You can read the full article here.
Report Shows Americans with Income Under $50,000 Particularly Anxious;
Borrowers Looking for Better Credit Review Processes as COVID Exposes Limitations of Current Methods
SALT LAKE CITY, Utah — Aug. 11, 2020 — Americans suffering personally from the financial impacts of the COVID economy worry, even when the pandemic crisis wanes and the economy begins to recover, that restoring their credit may take some time and hinder their purchasing power, according to a new report.
Americans at lower income levels, under $50,000 in annual household income, are particularly fearful, according to the report from Finicity, called Combating the Emerging COVID Credit Crisis. The data from this group paints a stark picture of financial loss from COVID-19, credit anxiety, and lagging financial literacy.
Most respondents said that participation in future credit markets may require changes that let responsible borrowers better prove their creditworthiness to lenders.
The report proposes that the eventual economic recovery from the COVID recession will hinge on major purchases which require credit for most consumers and if that credit is withheld because of short-term impact from being out of work or at reduced income levels, then broader economic issues may result.
“This health crisis is likely to bring an impending credit crisis along with it, and a key component of economic recovery will be consumers’ ability to secure the loans and credit needed to finance major purchases,” said Steve Smith, CEO and co-founder of Finicity. “Even when this crisis subsides and people return to work at their previous income level, bouncing back from this hit to their credit could still take years.”
The report, which is based on a survey of 2,000 US respondents in June, found that 55% of all respondents have lost their jobs or had their income impacted because of COVID-19. Those job and income losses have put a significant financial strain on those impacted, the report said, and are affecting credit usage. Far more than half (64%) of the impacted said personal economic conditions have made it difficult for them to keep up with bills and payments.
As a result of the COVID-19 financial hardship, 61% of the impacted are now concerned their credit will be negatively affected. And, nearly all (95%) of the impacted are concerned about their ability to rebuild their credit and finance purchases even after the pandemic and recession pass.
Lower Income Americans Especially Impacted
A deeper examination of consumers with annual household incomes below $50,000 shows that the pandemic created even more significant job and income losses, and also reveals an imbalance in credit opportunity for these lower income consumers.
The report found 73% of those with a household income under $50,000 said this financial situation has made it difficult for them to keep up with bills and payments. That was significantly more than higher income levels: 57% of those with a household income between $50,000 and $100,000, and 54% of those with a household income over $100,000.
Changes in Credit Processes
The large-scale loss of jobs and income in the COVID economy, and the mass anxiety over the impact to credit scores and the lengthy process of rebuilding credit, leaves many consumers looking for changes in the credit review process, including 82% of respondents saying they believe the current credit review process and criteria need to change to make it easier for responsible borrowers to demonstrate creditworthiness.
Many consumers want a better understanding of which personal financial data is used in lenders’ credit-decisioning process, and how that data is used. Consumers with the lowest household incomes show the least confidence in their knowledge of their financial data, as only 51% of those with a household income under $50,000 said they know what financial information lenders are using to determine creditworthiness.
“The idea of improving the credit process is not new, but the overall number of people who have been simultaneously affected as a result of COVID-19 shines a light on what borrowers have been facing for many years. There’s clearly a need to evaluate the credit-decisioning process and how consumers can become empowered to take control of their own financial data, and benefit from its use,” said Smith. “Real-time and reflective data is key to broader inclusion in the traditional financial system, and the emerging open banking model will provide the consumer empowerment needed while giving lenders a more robust picture of creditworthiness for borrowers.”
To read the full report, www.finicity.com/credit-impact-report, and to visit Finicity online, go to www.finicity.com.
About Finicity
Finicity’s mission is to help individuals, families and organizations make smarter financial decisions through safe and secure access to fast, high-quality data. The company provides a proven and trusted open banking platform, that puts consumers in control of their financial data, transforming the way we experience money — everything from budgeting, payments, investing and lending. Finicity partners with influential financial institutions and disruptive fintech providers alike to give consumers a leg up in a complicated financial world helping to improve financial literacy, expanding financial inclusion, and ultimately leading to better financial outcomes. Finicity is headquartered in Salt Lake City, UT. To learn more or test drive its API, visit www.finicity.com.
Media Relations Contact
Corbin Mihelic
104 West Partners for Finicity corbin.mihelic@104west.com
316-209-9794
New agreement signifies alignment between TD and the financial technology company about access to customer financial data
TORONTO, August 7, 2020 – TD Bank Group (TD) today announced a new data-access agreement with Finicity, which lays the groundwork for customers to request TD to facilitate the transfer of their financial data to services they want to use, including personal financial management apps supported by Finicity.
The North American agreement signifies alignment between TD and the financial technology company (Fintech) about how Finicity will access a customer’s financial data once directed by a customer of both TD and the Fintech. On the customer’s request, TD will transfer the customer’s financial data to the Fintech through a technology known as Application Programming Interfaces (APIs) that may eventually eliminate the need for customers to share their banking login ID or password in order to access third-party financial products and services.
Protecting Consumer Data
Consumers who are currently using financial products and services provided by some Fintechs are sharing their banking credentials in order to access these products and services. An API-based approach will help raise the level of data security for customers who want to use third-party financial management apps.
“The significant surge we have seen in the adoption of our own digital products and services has accelerated our work to create a market-led technology solution that will give customers looking to access digital services that are outside their bank, more comfort that they are transferring their financial data safely,” says Rizwan Khalfan, Chief Digital and Payments Officer, TD. “Our customers want digital solutions and we are focused on supporting their choices.”
Consumer-Directed Finance and Open Banking
The agreement with Finicity is part of TD’s response to customers’ need to leverage data stored with financial institutions for digital services. TD is a founding member of the Financial Data Exchange (FDX), a US-based industry consortium that promotes solutions to protect customer data, supports an API-based technology protocol and that recently launched in Canada with the support of leading Canadian banks and Fintechs. TD also recently invested in Akoya, a new, US-based company that will operate an API-based network for the secure sharing of financial data. In Canada, TD has been involved in government consultations to move Consumer-Directed Finance forward, while helping to protect consumer interests.
“We are committed to delivering superior data access, quality and security through the Finicity Open Banking platform, transforming the way consumers interact with and benefit from their own financial data,” said Finicity CEO Steve Smith. “Together with TD Bank, we are allowing consumers to become more empowered with their financial data and utilize it in ways that improves their financial lives.”
About TD Bank Group
The Toronto-Dominion Bank and its subsidiaries are collectively known as TD Bank Group (“TD” or the “Bank”). TD is the sixth largest bank in North America by branches and serves over 26 million customers in three key businesses operating in a number of locations in financial centres around the globe: Canadian Retail, including TD Canada Trust, TD Auto Finance Canada, TD Wealth (Canada), TD Direct Investing, and TD Insurance; U.S. Retail, including TD Bank, America’s Most Convenient Bank®, TD Auto Finance U.S., TD Wealth (U.S.), and an investment in TD Ameritrade; and Wholesale Banking, including TD Securities. TD also ranks among the world’s leading online financial services firms, with more than 14 million active online and mobile customers. TD had CDN$1.7 trillion in assets on April 30, 2020. The Toronto-Dominion Bank trades under the symbol “TD” on the Toronto and New York Stock Exchanges.
About Finicity
Finicity’s mission is to help individuals, families and organizations make smarter financial decisions through safe and secure access to fast, high-quality data. The company provides a proven and trusted Open Banking platform, that puts consumers in control of their financial data, transforming the way we experience money — everything from budgeting, payments, investing and lending. Finicity partners with influential financial institutions and disruptive Fintech providers alike to give consumers a leg up in a complicated financial world, helping to improve financial literacy, expanding financial inclusion, and ultimately leading to better financial outcomes. Finicity is headquartered in Salt Lake City, UT.
CEO Steve Smith talks about how embracing digitization and implementing a more transparent credit decisioning process can help small businesses in today’s challenging circumstances. Read the full article at SmallBizDaily.
Finicity CEO Steve Smith spoke to Banking Dive about the Mastercard deal, how it compares to Visa’s plans with Plaid, and the future of open banking in the U.S. Read the full Q&A at Banking Dive’s website.
In a discussion with Squawk on the Street’s Jim Cramer, Michael Miebach, Mastercard president and incoming CEO, discusses the acquisition of Finicity for $825 million as well as how the coronavirus pandemic has impacted business.
Watch the video below or watch it on CNBC’s website.
Craig Vosburg, Mastercard North America President, joins Yahoo Finance’s Brian Sozzi and Alexis Christoforous on The First Trade to break down the details of its $825 million dollar purchase of the financial data company Finicity.
Watch the full interview on Yahoo! Finance’s website.
American Banker’s Penny Crosman discusses how data aggregation and open banking platforms are becoming viewed as the next steps in transforming the financial services and payment processing industry.
Read the full article on American Banker’s website ($).
Mastercard’s acquisition of Finicity for $825 million is the second big money Utah acquisition of 2020. The Deseret News’ Art Raymond writes about the fit between Finicity and Mastercard, as well as where Finicity fits in Silicon Slopes and the Utah tech scene.
Read the full article on the Deseret News’ website.