Learn how Fair Finances uses real-time bank data from DirectID to scale their business and provide customers with faster, fairer loans.
Who are Fair Finance?
Fair Finance is a social lender offering a range of products and services designed to meet the needs of people who are financially excluded. Their aim is to revolutionise finance, starting with the people whom the mainstream providers have left behind.
The organisation has a staff of 43 people, with six branches across the city and 15,000 clients. With growth as a goal, scaling online is the company’s priority. Fair Finance use DirectID as part of its underwriting process for personal and business lending services.
What does Fair Finance use DirectID for?
1. Scale The Business Beyond The Branch
Before using DirectID, Fair Finance was a retail business with a shopfront model serving clients that came through the door. In order to scale the business, moving online was the company’s only option. With access to over 5,500 banks globally DirectID’s bank verification capabilities have enabled Fair Finance to expand their product offering purely online across the UK.
"Thanks to DirectID, we’ve been able to scale our business loan service outside London and start making loans across the United Kingdom.” – Faisel Rahman, CEO
2. Reduce Bank Statement Fraud
Bank statements supplied by applicants come with some risk of fraud and require careful investigation to ensure they have not been tampered with. Because DirectID requires an applicant to connect to their online bank account and their statement information is shared in a read only format, Fair Finance can be certain the information is coming directly form the bank.
“We’ve seen bank statements sent to us by PDF, where if you looked really carefully you could see that people had photocopied bank logos onto them. Now we rely on the DirectID bank verification system to make sure the bank statements coming through to us are correct.”
3. Access Real And Meaningful Data
The challenge with responsibly lending to the financially excluded is often a lack of available information and credit history. In business lending much of the company information it is often out of date by as many as 12 or 18 months.
DirectID provides real-time bank statements that give insight into an individual or company’s current financial position, including income and expenditure, allowing Fair Finance to make accurate Affordability assessments. Because these bank statements come directly from the bank, Fair Finance can trust the information and use it to make responsible decisions that best match their clients’ needs.
“DirectID supports our underwriting process and decisions and helps demonstrate how we’re lending responsibly.”
4. Spend More Time With Clients
The Fair Finance model is predicated on building strong relationships with clients. Its prior traditional approach to underwriting meant the team was spending hours, days and – in some cases - weeks analysing bank statement PDFs, compromising their ability to build personal relationships with clients.
By providing downloadable digital bank statements in a consistent format for easy analysis, DirectID frees up time for the underwriting team to speak directly with clients and ask more relevant questions related to their finances.
“DirectID gives us data in a format that allows us to close loans in as little as 48 hours so we can spend more time on the personal relationship side with clients.”
'Poached Creative', a real-world example of DirectID transforming Fair Finance loans.
Poached Creative is a social enterprise that puts communication jobs within the reach of marginalised communities. While they are sustainable, they receive fees for placing people and so their income is variable, sometimes high and low. Because of this Poached Creative weren’t able to get a loan from a traditional bank so they turned to Fair Finance. Fair Finance had them share their bank statements using DirectID and, following analysis and some additional credit checks, were able to approve the loan application within 48 hours.
“We later discovered that the Poached Creative office was in the same building as ours, two floors down. They applied online and probably got a loan quicker than if they had come in to see us face to face.”