The University of Edinburgh, Afterbanks and Inbest are collaborating on a new research project that aims to develop new methods for affordability assessment. On the one hand, they will explore new statistical frameworks to take into account the changing nature of consumers personal circumstances, financial situation and behaviours. On the other hand, they will leverage on Open Banking to not only assess whether the credit is affordable at the point is taken out, but also throughout its whole life.

This research follows the new FCA regulation that makes mandatory for consumer credit lenders to include an affordability assessment (i.e. estimate borrower’s ability to undertake the credit commitments without incurring into financial struggles) into the wider consumer creditworthiness analysis.

Raffaella Calabrese, Associate Professor at the University of Edinburgh Business School, said: “The affordability assessment is not only different between borrowers, but also changes in time for the same borrower when new relevant information is available. By introducing a dynamic time-series analysis we expect to increase the accuracy and robustness in the affordability prediction.”

David Lozano, CEO of Afterbanks, said: “Our platform provides financial data to grant over 30,000 personal loans per month in Spain, and this project is an unparalleled opportunity to adapt our data platform to the UK market and regulation. We are also excited to become part of the Scottish Fintech Ecosystem, hand in hand with the University of Edinburgh and Inbest”.

Manu Peleteiro, CEO of Inbest, said: “We are delighted to strengthen our partnership with the University of Edinburgh. Our ongoing collaboration has become a source of competitive advantage, and the IP we developed helped us to secure projects with large financial providers in Spain. We are also thrilled to welcome Afterbanks – one of the fastest growing Fintech companies in Spain – to the Scottish Fintech ecosystem”.