Overdraft Protection

Use Case: Overdraft Protection

Problem

63% of Americans live paycheck to paycheck, and many use overdrafting as a way to borrow money. The average overdraft fee is $35, even for overdrawing by a few dollars. For this reason, overdraft fees are effectively enormous interest on funds that could be buffered by overdraft protection.

Building overdraft protection features requires sophisticated cashflow and risk analysis in order to:

  • Accurately predict the likelihood of overdrafts
  • Provide the correct amount of protection while ensuring that the user will be able to repay
  • Help the user track their cashflows including  spending habits, bills, and expected income and inflows

How we help:

Attributes Endpoint

Pave’s 100+ attributes surface insights into a user’s cashflow and ability to repay an overdraft. Use these attributes in your own custom risk model. 

Connect your data sources to Pave and retrieve the following types of attributes within seconds:

  • Income history and predicted future income
  • Gambling habits and expenditure shocks
  • Current debt payments and predicted future bill amounts
  • Bank transfers and bank fees
  • 100+ more – we’re launching new attributes weekly

Affordability and Risk Scores

Pave’s affordability scores are trained on a large and growing dataset of overdraft history across our vast network of customers. Our scores help drive lift in your models for:

  • Predicting the likelihood of default on an overdraft
  • Predicting failed payments or transfers
  • Predicting the overdraft amount a user can afford to repay

Detect Other Financial Accounts

Often times a user will connect an account that has insufficient account history or doesn’t meet your qualifying criteria. 

Pave allows you to prompt users to connect additional accounts that have been detected in transaction history to:

  • Increase acceptances by prompting users to connect a different account if their connected account does not have sufficient history or data
  • Improve risk models by analyzing signals and behaviors across multiple connected accounts

Detect Deposit Amount Required

Given that many people live paycheck to paycheck, it can be difficult for users to understand how much money they need at a certain time to be able to cover their bill payments, especially when unexpected expenses arise.

Pave allows you to retrieve a field that tells fintechs how much a person has to deposit in order to pay upcoming bills and avoid an overdraft. This allows you to:

  • Predict the required deposit amount to maintain a positive balance
  • Reduce overdrafts by recommending users suggested deposit amounts