And things aren't much better in the UK. 30% of Brits have made use of BNPL, and 31% of those have
admitted that the repayments associated with this form of lending have become unmanageable.
While uncontrollable debt is a clear stressor on those who are being chased by debt collectors, it has
another side effect – with growing losses and a lack of debt repayment, lenders are less and less likely
to make loans. Credit checks associated with open banking are a great way to prevent, if not
drastically lower, the resulting customer defaults, while also helping consumers avoid unaffordable
debt. What's more? This credit check can be re-done periodically to ensure the clients are still able to
afford their purchases. Essentially, open banking has the opportunity to make BNPL more
sustainable.
The data provided from open banking provides real-time accurate data that can be re-checked up to
four times a day, for up to 90 days from the initial connection. With this, BNPL providers can not only
better understand someone's current liquidity, but also understand the other potential commitments
they have to other BNPL providers.
Curious about the other ways in which open banking can improve BNPL products? Next to credit
checks to determine affordability, open banking can also be used to reduce fraud by identifying
questionable customers.
going anywhere – increasing costs of living and interest rates are only amplifying its demand.
Regulatory entities and governments are therefore focused on ensuring consumer protection, while
continuing to provide access to flexible payment financing. While open banking cannot solve all of
these issues, it has the possibility of being a large part of the solution.
hile BNPL providers are under plenty of pressure with evolving economic conditions and a
probable looming recession, they also are in the privileged position to improve their
products to benefit both BNPL providers and users. Easy credit products like BNPL aren't
Sopra Banking Software is the partner of choice for more than 1,500 financial institutions worldwide. The
rich variety of our solutions, the strength of our conviction and our passion for innovation enable us to
support our clients on a daily basis and in their future projects, as well as in their goals regarding financial
inclusion. Our customers, based in over 80 countries around the world, benefit every day from our
technologies and software, as well as the expertise of our 5,000 employees. Sopra Banking Software is a
subsidiary of the Sopra Steria Group, a European leader in consulting, digital services and software
development. With more than 47,000 employees, the Sopra Steria Group generated a turnover of €4.7
billion in 2021. For more information, follow us on LinkedIn, Twitter & Instagram or visit
www.soprabanking.com
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