Wednesday, August 14, 2024 Mastercard is advancing its Open Banking for Lending initiative, in partnership with Argyle, to simplify the lending process and empower consumers with greater control over their financial lives. With new enhancements, Mastercard can now offer income and employment verification to approximately 95 percent of the U.S.
workforce who receive payments via direct deposit. This innovation is set to drive smarter, more inclusive lending decisions and help integrate more people into the digital economy. Obtaining a loan can be daunting, particularly for the 19 percent of individuals who are not part of the traditional credit reporting system and struggle to access credit cards or rent apartments.
Digitization has the potential to change this landscape; a recent Mastercard survey on lending trends revealed that 90 percent of consumers with insufficient credit history are willing to provide secure digital access to their financial accounts to secure a loan. While consumers are generally open to faster, digital processes, current methods for verifying income and employment are often manual and cumbersome. Applicants typically spend significant time gathering paystubs and tax documents, while financial institutions must allocate resources to verify this information.
This burdensome process can lead to applicants abandoning their loan applications altogether, especially those without consistent income streams, such as gig economy workers. To address these challe.