A new digital consumer lender, Fintern, has announced its launch to the market and revealed it will bypass credit scores in making lending decisions, to instead focus on affordability.

The lender said it will “radically transform” the financial wellbeing of people with an innovative and sustainable lending approach.

The UK consumer lending market is worth £160bn, but Fintern has estimated that 15 million people in the UK are denied access to affordable loans – suggesting these people are resorting to unsustainable means including high-cost lenders and buy-now-pay-later schemes to manage their lives.

Fintern plans to integrate its AI platform with open banking to “smartly connect the dots” in consumers’ banking data, which will enable the lender to obtain an accurate view of borrowers’ affordability and spending behaviour using real time transaction information.

“Fintern will help people to really understand what is affordable for them, rather than offering yet another faceless transactional process,” commented CEO and co-founder, Gerald Chappell.

“Currently, lenders either lend money or don’t, and then don’t engage with the borrower again until the loan terms ends or payments are missed.

“Our success as a lender lies in the ability of our customers to repay their loans. Our AI-powered technology helps us and all our customers to understand their finances in a deeper, more hands-on way than ever before. This approach allows us to increase approval rates, lower APRs and empower our customers to make the best and most responsible borrowing decisions for them.”

While most lenders use traditional behavioural credit scoring to separate high and low quality customers, Fintern believes this “performs poorly” in differentiating risk among the majority of people.

Fintern COO and co-founder, Michelle He, suggested the lender will differentiate itself in the marketplace by being “closer to its customers than incumbent lenders can ever be”.

“Intelligently integrating AI and open banking data disrupts credit decisioning for the better of all customers,” added He.

“Doing it well requires the right experience. Data and technology are Fintern’s bread and butter. We have an amazing team with extensive experience in digital lending and credit analytics. They are customer obsessed and have made the Fintern app a unique experience.”

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