Big data analytics firm Hello Soda is today disputing claims that banks need to ‘ditch’ customers to lower their risk.

A study by the Financial Conduct Authority (FCA) this week found that banks were turning away or closing the accounts of customers deemed to be high risk, which includes foreign nationals and students, with two large British banks closing around 1,000 personal accounts a month to curb these risks. In addition, the FCA warned that banks could fall foul of competition law if they refuse new business or close accounts without good reason.

But today, Hello Soda has said it believes that banks could be turning customers away unnecessarily because their practices are antiquated and not giving them reliable, accurate risk assessments. The firm’s claims are evidenced in a recent study Hello Soda published with Visa Europe Collab which found that social media profiling can be effectively used to verify consumer identify and boost financial inclusion.

“Traditional data sources such as credit checks are not sufficient for modern banking,” James Blake, founder and CEO of Hello Soda, commented. “There has been a significant rise in the number of thin credit files – that is consumers without a credit footprint. Traditional credit scoring methods rate the lack of a consumer’s credit history as high risk – even though they may be more responsible and reliable than those deemed as low risk. The problem is that credit scoring techniques are becoming increasingly archaic and are leaving banks unable to service both existing and potential customers. Traditional ID verification techniques fall down for the 9.5 million consumers who don’t have a passport or a driving licence – that’s 17% of the population. Consumers with no permanent address or who move often can also be flagged as high risk and therefore have problem opening bank accounts and accessing credit – which particularly affects members of the Armed Forces and students or even those who have travelled a lot and lived abroad. All financial services firms have a responsibility to treat customers fairly. We believe that banks turning away consumers is verging on breaching Treating Customers Fairly regulations particularly as there are now effective pioneering methods of being able to credit assess consumers through big data analytics.”

The FCA report highlights that consumers’ ability to access financial services helps to improve market integrity, drive competition and promote financial stability and economic growth. However, potentially millions of UK consumers cannot use the services that would help them meet their needs and play their wider role in financial markets and the economy.

Blake continued: “The implementation of big data analytics can enable individuals who are traditionally viewed as high risk to access credit – potentially for the first time. Individuals who could benefit include young people without a long-standing credit history who are struggling to buy their first home and foreign immigrants unable to transfer credit history between countries. We’ve already seen this have a big impact in its ability to verify ID and increase loan accepts.

“It’s understandable that banks can’t make meaningful decisions such as on loan acceptances or even something as fundamental as verifying identification if the data isn’t available through traditional routes. However, this is where big data steps into the breach and as financial institutions begin to utilise it, we’re starting to see a revolution.”

Source: Creditman

Mary Taylor
Director

Mary began working in insolvency for a national accountancy practice in Glasgow thirty years ago and worked in most divisions of the insolvency department.

She then moved to a smaller firm so she could advance her knowledge on a more hands on basis. She moved back to Leeds in 1987 and commenced working with a small firm of accountants and subsequently made partner.

She left in 1999 to set up her own practice, McCann Taylor.
McCann Taylor became involved with the consumer market both in England and Scotland.

Mary sold McCann Taylor in March 2007 and formed Walsh Taylor to concentrate on helping businesses experiencing financial difficulties.

Kate Ellis (neé Breese)
Director

Kate has worked in insolvency since 2001 starting out at a firm of solicitors in Leeds and latterly gaining positions within two national accountancy firms.

During this time Kate gained extensive experience in all aspects of personal and corporate insolvency, for the first part of her career specializing in personal insolvency and latterly corporate.

Kate has been with Walsh Taylor since its incorporation in September 2008, being promoted to Director in January 2010.

Kate is CPI and JIEB qualified, is experienced in a variety of industries and sectors and is the firm’s joint appointment taker.

Meg Heath
Director

Meg has a background in supporting SMEs, including the raising of finance and advising on organisational change. She is a non-executive director of companies in the private and third sector, including Walsh Taylor.

Previously she was Deputy Fund Director of one of the largest CDFIs in the UK, and has experience of the social enterprise, charity and private sectors. Her experience of assisting companies to survive and thrive has been gained across a broad range of sectors and in companies of all sizes.

In addition to her work at Walsh Taylor she works for other private companies, including non-executive and trustee positions.

Emma Mifsud
Director

After graduating from Leeds University in 2005 with a BA Hons degree in Criminology, Emma worked for a regional law firm in both the property department and insolvency and banking department. Whilst doing so Emma gained a Graduate Diploma in Law at BPP University.

Emma then joined a national accountancy firm in 2009 gaining experience in personal insolvency before moving to a Leeds based firm. At this firm Emma specialised in bankruptcies, IVA’s and negotiating informal agreements with creditors. In 2013 Emma gained her CPI qualification.

Since joining the firm in December 2013, Emma has taken on a portfolio of personal and corporate insolvency cases to extend her knowledge and expertise in all areas of insolvency.

In December 2017 Emma become a licensed appointment taker under the Insolvency Practitioners Association, she is JIEB qualified.

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