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Mortgage Trends, AI Regulations, and Poverty Drivers

Mortgage Trends, AI Regulations, and Poverty Drivers

Paul Sweeney | Chief Strategy Officer
Credit Shift podcast on Spotify Credit Shift podcast on Apple 


Hosted by Paul Sweeney, Co-founder and Chief Strategy Officer at Webio, and featuring Delia Jones, Chief Operating Officer at Webio, this podcast episode delves into several key areas in the credit industry.


1. General Industry News

The UK Finance Household Review for Q1 2023 highlighted a significant decrease in mortgage lending and a rise in house prices to an average of £283,615, driven by a shortage in supply. Despite overall high savings, a decrease in deposit levels signals a potential reduction in pandemic savings. The report emphasised the uneven distribution of savings across income groups, with a third of private renters unable to afford a month's rent if jobless.

Additionally, the use of Buy Now Pay Later (BNPL) schemes has surged for Christmas expenses, leading to a rise in BNPL-related debts and calls for urgent regulation.

2. AI and Legislation 

A landmark EU Court ruling on GDPR declared automated decisionmaking with personal data in scoring systems as unlawful, emphasising the need for explainable AI models. The EU's AI Act introduces more scrutiny on large AI platforms, requiring transparency in operational mechanisms. The podcast discussed the readiness of the credit and collections industry for regulatory compliance and the balance between innovation and regulation.

3. State of Poverty in the UK

The "Two Nations" report revealed an acceleration of poverty drivers during the pandemic, including family breakdown, addiction, worklessness, serious personal debt, and education failure. Despite some positive developments, like lower unemployment rates and improved literacy levels, the nature of employment has shifted towards part-time, insecure jobs. The report also highlighted the rise in economic inactivity due to long-term sickness and mental health issues.

The podcast concludes with a focus on the need for empathetic and strategic approaches in financial services and technology to address these wide-ranging challenges.

Sources:
https://www.creditstrategy.co.uk/latest-news/mortgage-lending-declines-sharply-in-q3
https://www.creditstrategy.co.uk/latest-news/house-prices-rise-for-second-month-in-a-row
https://www.bighelpproject.com/news/a-third-of-private-renters-would-not-be-able-to-pay-one-months-rent-if-they-lost-their-job
https://www2.deloitte.com/us/en/pages/consulting/articles/ai-dossier-government-public-services.html
https://www.oecd.org/gov/innovative-government/working-paper-hello-world-artificial-intelligence-and-its-use-in-the-public-sector.htm
https://apolitical.co/solution-articles/en/artificial-intelligence-in-public-service-benefits-risks-and-what-to-expect-in-the-future
https://www.linkedin.com/pulse/ai-public-sector-potential-pitfalls-buttoninc
https://www.sciencedirect.com/science/article/pii/S0740624X22000375
https://www.centreforsocialjustice.org.uk/wp-content/uploads/2023/12/CSJ-Two_Nations.pdf

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