Making lending fairer: How spending data supports financial inclusion

Over 20 million adults in the UK are still underserved by the financial system. And it’s not because they’re financially irresponsible—it’s because traditional assessments don’t tell the full story.

These individuals might be gig workers with irregular income, young professionals without a credit history, or renters who’ve always paid on time but never taken out a loan. The result? They’re often excluded by risk models that rely too heavily on credit files and fixed-income data.

In other words, the tools we use to assess affordability haven’t kept up with how people actually live and work today.

That’s where spending patterns, income flows, and transaction-level insights come in. When you understand how someone really manages their money, you start to see opportunities that traditional data often misses.

The people traditional models overlook

Let’s look at two examples.

Example 1: Gig workers with variable income

Freelancers, drivers, and contractors often have earnings that go up and down, which traditional models tend to flag as unstable. But if you look at their transaction data, a different story often emerges:

• Regular income across multiple sources

• Consistent payments for rent, bills, and other essentials

• Signs of savings and good financial habits

Even so, many of these individuals are turned down for credit, mortgages, or even current accounts—not because they’re high risk, but because their income doesn’t fit the expected mold.

And here’s another common group that gets missed:

Example 2: Young adults with limited credit history

Graduates and early-career professionals may not have taken out credit yet, so their files look thin. But spending data often shows:

• Rent and utility bills paid on time

• Steady savings behaviour

• Careful day-to-day money management

In other words, they’re doing all the right things. They’re just not being seen by traditional assessment tools.

Despite showing signs of financial responsibility, these people fall through the cracks because their behaviour doesn’t show up in the data lenders rely on. That’s why a closer look at income and spending can make such a difference. It allows lenders to:

• Identify financially stable customers who don’t fit the usual profile

• Avoid misclassifying people as high-risk

• Widen access to fair financial products

Rethinking how we measure affordability

Improving financial inclusion starts with asking better questions about affordability.

Right now, many models struggle to reflect real lives. That’s because:

• They assume fixed, monthly salaries—so anyone with variable or freelance income is often excluded

• They focus on the past—annual income or old credit behaviour—rather than what’s happening now

• They apply the same structure to everyone—ignoring the fact that people manage money in very different ways

This one-size-fits-all approach leaves a lot of capable, responsible customers out in the cold.

But it doesn’t have to be that way. There’s a better approach—and it starts with better data. By using cashflow data and real-time transactions, lenders can create products that reflect how people actually manage their finances—not just how they look on paper.

What better data makes possible

Here are just a handful of ways the right data can support financial inclusion:

✅ Flexible lending for non-traditional earners
When income isn’t consistent, traditional checks fall short. Cashflow analysis, on the other hand, can reveal:

• Steady income from multiple jobs or sources

• Responsible money management over time

• The ability to cover essentials and build savings

This helps lenders avoid unnecessary declines—and make confident decisions about who to lend to.

✅ Smarter savings and budgeting tools
People with fluctuating income aren’t bad at saving. They just need tools that flex with their finances. With spending insights, it’s possible to:

• Spot opportunities to save without adding financial pressure

• Automate savings based on income patterns

• Provide helpful nudges grounded in real behaviour

✅ More accurate affordability checks
Instead of relying on outdated snapshots, real-time data shows how someone is managing right now. That means you can:

• Spot financial stress early—before it leads to missed payments

• Match lending products to actual affordability

• Offer support that’s proactive, not reactive

Why this benefits both sides

And here’s the best part—it’s a win-win for both sides. Everyone gains when lenders assess financial health more accurately.

For your customers:

• Fairer access to credit, savings, and support—especially for those with non-traditional income

• Better financial wellbeing, thanks to products that fit real lives

• Less stress, with clearer communication and smarter support

For your business:

• New customer segments that were previously out of reach

• Lower risk, with more precise affordability assessments

• Stronger relationships, built on trust and relevance

• Alignment with regulation, as financial inclusion becomes a growing focus

In short, smarter data helps you serve more people responsibly—and grow your business at the same time.

Seeing the full financial picture

People with limited credit histories or unconventional income often fall through the cracks—not because they’re high risk, but because traditional systems don’t see the full picture.

With transaction-level data, that changes. You can:

1. Spot hidden creditworthy customers: Look past the credit score. Identify regular income, stable spending, and consistent bill payments.
   
   

2. Make better lending decisions: Understand real-time income and outgoings, not just a past salary or loan history.
   
   

3. Offer support earlier: Spot early signs of difficulty—like increased overdraft use—and reach out before things escalate.
   
   

4. Design products that match real lives: Create flexible repayment plans or savings tools that reflect how people actually manage money.
   
   

5. Turn rejections into approvals: Revisit declined applications with fresh insight—finding responsible borrowers who were missed the first time around.
   
   

Financial inclusion doesn’t mean taking more risk

Too often, inclusion is seen as a risk. But that’s usually because decisions are being made on incomplete or outdated information.

When you can clearly see spending patterns, income trends, and early signs of stress, it becomes easier to separate genuine affordability concerns from people who simply don’t fit the old model.

To sum up, financial behaviour gives you the detail you need to make better decisions—and offers fairer access to those who’ve been left out for too long.