Fintechs say bank claims are bulldust
Companies that operate at the intersection of banking and technology are calling bulldust on bank claims that responsible lending proposals will be hard to implement, costly and inaccurate.
Start-ups have got stuck into the banks for a campaign of scaremongering designed to stoke fears that enhanced lending guidelines will be either time-consuming, costly and restrict the availability of credit.
Mr Anthony Baum, founder and CEO of automated home loan application tic:toc, said claims from the banks that accurate validation of customer expenses was too difficult or not feasible were rubbish.
“That doesn’t hold water because we’ve been doing it from 2017. If fintech from Adelaide can do it, then why can’t a major bank?” he said.
The big four banks have resisted calls to abandon a controversial lending benchmark and provide more detailed analysis of borrower spending habits in order to assess suitability in responses to a proposal from the regulator on Monday.
The Australian Securities and Investments Commission is trying to force the banks into abandoning the household expenditure measure (HEM) as a benchmark for lending.
Critics of the HEM say the benchmark under-estimates expenses by excluding spending on childcare and other categories.
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