• Dan Scholey, Chief Product Officer at Moneyhub


• 11.02.2026 02:15 pm
#Lending #Data

The ongoing cost of living crisis remains a major concern for families across the UK. Consumer inflation persists, with the figures floating well above the Bank of England's two per cent target.

The British Retail Consortium blames rising prices on changes made by the government, including increased employer national insurance contributions and a higher national living wage. While the industry waits to see what measures the government introduces, lenders and other financial providers can help ease the growing burden on consumers by adopting the latest technological innovations.

Understanding the limitations of traditional credit scoring

As savings run dry, people are increasingly turning to credit. Recent government figures reveal 84% of UK adults have some form of credit or loan, with 14% saying they're using more credit than ever before.

With cost of living pressures and Consumer Duty requirements converging, lenders need more sophisticated affordability assessments. Traditional credit checks simply aren't aligned to real life anymore. They give lenders insufficient information that fails to capture current financial stability or alternative indicators of creditworthiness, such as additional sources of income or assets.

Imagine a successful, self-employed entrepreneur with irregular income. They are building their business but not their credit history so traditional systems say 'no', but real life says 'they're a good risk.' By focusing on historical borrowing behaviour, people with thin, or no, credit files are often excluded. People who need help the most are easily overlooked and underserved.

Thanks to Open Finance and developments in AI, lenders can now move beyond these constraints. By drawing on enriched transaction data and advanced categorisation technology, they're able to make more accurate, fairer, and personalised lending decisions.

Providing the insights needed for real life

Data enrichment converts raw, real-time transactional data into valuable and actionable insights. AI-powered categorisation technology applied to this enriched data can more accurately classify complex transactions, track evolving customer habits, and predict future financial behaviours that static, rule-based systems cannot.

This approach substantially improves risk and affordability assessments, allowing lenders to make smarter credit decisions and reduce defaults. By gaining a deeper understanding of a customer's regular cashflow, lenders can offer timely and personalised loan products, increasing customer satisfaction and retention.

Crucially, it enables lenders to detect early warning signs of financial distress, such as slow payments, reduced incomes, or increased expenses. This empowers financial institutions to proactively identify vulnerable customers, offering timely solutions and operating in the spirit of Consumer Duty rules.

Creating a brighter future for Britain's borrowers

One provider benefiting from these capabilities is Admiral Money. The company was looking to use best-in-class enrichment and automatic affordability checks to support quicker underwriting decisions for loan referrals while maintaining its disciplined approach to risk selection.

We worked in close partnership with Admiral Money, deploying affordability checks using our AI-powered categorisation and enrichment engine. Admiral Money has subsequently been able to say yes to an additional 18% of loan applicants.

The company has halved its underwriting time per application from 30 minutes to 15 minutes. And it has strengthened repayment rates and fraud detection. Ultimately, it has built stronger, more secure relationships with its customers without compromising its risk profile.

In a world demanding more from financial services, the future of lending isn't just about data. It's about understanding the real lives behind that data and then building solutions that work for them.