The state of the economy at the street level

[farmerge]

Complaint received from Jack.
Please refrain from using Jack in this context.

In keeping with modern inclusive times, please use "Jill".
EG;

Isupposs we could use Fred

 

[divs4ever]

how about Charlie that seems to cross the gender boundaries now-days it's all in the pronunciation now ( thank goodness i am going deaf )

 

[moXJO]

Shops were packed. A lot of early Christmas shoppers. All the car parks were full. I blew through a wad of cash again.

 

[Dona Ferentes]

Why banks spy on your petrol bills​

Banks are prying into customers’ spending – including the amount of petrol going into the family car – to identify those who are heading toward a home loan default well before they miss a repayment.

One technique, using technology developed by London-listed Experian, involves identifying borrowers who used to fill up their petrol tank to the top every time they visited the bowser – but now are only paying a round number and driving away with less than a half-filled tank.

Banks see the behaviour as a red flag a customer may be struggling more broadly with the rising cost of living, making them more at risk of becoming late on repayments compared to a driver filling up to the brim.

“This is a signal people are starting to find it tough,” says Jordan Harris, head of innovation at Experian. “Some banks are getting more sophisticated, looking at behavioural things people do.
“These are not the sort of things they have had to do in the past. But with interest rates higher, there are new ways to look at customers in stress and spot hardship at an earlier stage.”

Using Experian’s tools, banks can match up customer payments with particular merchants – like the petrol station – allowing them to see where, and how much, home loan customers are spending.

Banks feed the data into credit risk algorithms that help them determine the level of loan provisions that may be needed in a forward financial year to cover for defaults; and also which customers to proactively call to ask whether they are coping and to provide advice on budgeting to make sure they can meet commitments to the lender.

Banks scan payments data across the retail economy to detect “basket switching”, which can also raise an alarm that soaring living costs are starting to bite.

Lenders look at customers who move down market – shifting from a more expensive grocer to Woolworths, then to a discount supermarket such as Aldi. Or swapping from a local wine cellar to BWS.

More obvious tools include flagging customers who start using more buy now, pay later loans, and those with direct debit payments connected to a phone or energy company being dishonoured.

“The big banks have complex models, considering thousands of potential signals,” Harris says. “The name of the game is to find out who looks like they are experiencing a bit of financial stress, even though they haven’t missed a repayment, and are up to date on all lending facilities.”

It’s not only home loan customers that major banks monitor in this way. “We have similar credit flags on the business side,” says National Australia Bank’s head of business banking, Andrew Irvine. “We have data engines constantly working to update us on how businesses are trading compared to historic trading patterns,” he says.
“If we see flags, we can have a conversation with them. We might do that six or nine months before they move into what might typically be viewed as ‘hardship’ and they are actually missing payments."

 

[SirRumpole]

Why banks spy on your petrol bills​

Banks are prying into customers’ spending – including the amount of petrol going into the family car – to identify those who are heading toward a home loan default well before they miss a repayment.

One technique, using technology developed by London-listed Experian, involves identifying borrowers who used to fill up their petrol tank to the top every time they visited the bowser – but now are only paying a round number and driving away with less than a half-filled tank.

Banks see the behaviour as a red flag a customer may be struggling more broadly with the rising cost of living, making them more at risk of becoming late on repayments compared to a driver filling up to the brim.

“This is a signal people are starting to find it tough,” says Jordan Harris, head of innovation at Experian. “Some banks are getting more sophisticated, looking at behavioural things people do.
“These are not the sort of things they have had to do in the past. But with interest rates higher, there are new ways to look at customers in stress and spot hardship at an earlier stage.”

Using Experian’s tools, banks can match up customer payments with particular merchants – like the petrol station – allowing them to see where, and how much, home loan customers are spending.

Banks feed the data into credit risk algorithms that help them determine the level of loan provisions that may be needed in a forward financial year to cover for defaults; and also which customers to proactively call to ask whether they are coping and to provide advice on budgeting to make sure they can meet commitments to the lender.

Banks scan payments data across the retail economy to detect “basket switching”, which can also raise an alarm that soaring living costs are starting to bite.

Lenders look at customers who move down market – shifting from a more expensive grocer to Woolworths, then to a discount supermarket such as Aldi. Or swapping from a local wine cellar to BWS.

More obvious tools include flagging customers who start using more buy now, pay later loans, and those with direct debit payments connected to a phone or energy company being dishonoured.

“The big banks have complex models, considering thousands of potential signals,” Harris says. “The name of the game is to find out who looks like they are experiencing a bit of financial stress, even though they haven’t missed a repayment, and are up to date on all lending facilities.”

It’s not only home loan customers that major banks monitor in this way. “We have similar credit flags on the business side,” says National Australia Bank’s head of business banking, Andrew Irvine. “We have data engines constantly working to update us on how businesses are trading compared to historic trading patterns,” he says.
“If we see flags, we can have a conversation with them. We might do that six or nine months before they move into what might typically be viewed as ‘hardship’ and they are actually missing payments."

Very decent of them to be so concerned for the customers.

 

[qldfrog]

Very decent of them to be so concerned for the customers.

Joke aside, isn't it actually a good thing instead of denial and acting too late, especially here where bankrupt is not that easy

 

[SirRumpole]

Joke aside, isn't it actually a good thing instead of denial and acting too late, especially here where bankrupt is not that easy

Yes I suppose it's better than letting people go broke and then repossesing their assets and leaving them out in the cold.

I retract my previous cynical comment.

 

[frugal.rock]

isn't it actually a good thing

Are you feeling ok Msr Frog?
Reminder, it's a bank initiative, it's spyware, it's creepy and stalking. It's abuse of our data and I didn't sign up for it.
Shall I continue?
The cash king's don't have this problem with banks... yet.

 

[Dona Ferentes]

I thought it was metadata

 

[divs4ever]

Very decent of them to be so concerned for the customers.

maybe we should repay the concerns and put in systems to audit senior management ( and directors ) for various issues ( gambling , excessive alcohol budgets , up-market boat/yachts ) , just is case they are stretching the credit themselves

 

[Dona Ferentes]

ok, we'll throw the switch to anecdote.

chatting with a guy who owns a couple of IGAs, the takeout on takeaway grog is that boutique and craft beer sales have just fallen off a cliff in the last month, with the cheaper stuff, XXXX, VB , etc selling strongly.

 

[divs4ever]

Joke aside, isn't it actually a good thing instead of denial and acting too late, especially here where bankrupt is not that easy

WHAT ?? you mean they don't line up prospective buyers of distressed assets/property

maybe things have changed

 

[qldfrog]

Are you feeling ok Msr Frog?
Reminder, it's a bank initiative, it's spyware, it's creepy and stalking. It's abuse of our data and I didn't sign up for it.
Shall I continue?
The cash king's don't have this problem with banks... yet.

Ok, agree on that. Was more looking at the acting early

 

[SirRumpole]

Posted in another thread.

The data is in: a generational shift of wealth is under way in Australia

Rising debt repayments alongside elevated savings rates are moving money from young to old, experts say, leaving younger people under growing strain

www.theguardian.com

I'm pretty sure what is said in this article is on the mark, but I doubt if most of us old superannuants will care much.

 

[divs4ever]

Posted in another thread.

The data is in: a generational shift of wealth is under way in Australia

Rising debt repayments alongside elevated savings rates are moving money from young to old, experts say, leaving younger people under growing strain

www.theguardian.com

I'm pretty sure what is said in this article is on the mark, but I doubt if most of us old superannuants will care much.

depends on how much superannuation you managed to accumulate , some of us barely have enough for a modest car after fees, charges , taxes and insurance premiums

it's fine for those 20 year plus public servants who had some very nice fund opportunities , but some employer-managed funds seemed to have a different agenda ( than creating a retirement nest-egg for low-ranking employees )

and well .. we had a Hayne Royal Commission to highlight some flaws in professionally managed funds

and THEN you had some politicians spruiking up reverse mortgages to boost your meager retirement incomes ( and yet i would get heavily fined for giving such financial advice )

just more media 'divide-to-rule '

 

[Belli]

Posted in another thread.

The data is in: a generational shift of wealth is under way in Australia

Rising debt repayments alongside elevated savings rates are moving money from young to old, experts say, leaving younger people under growing strain

www.theguardian.com

I'm pretty sure what is said in this article is on the mark, but I doubt if most of us old superannuants will care much.

Naught but click bait. Those 65 yo+ are retiring in large numbers. In the 10 or 15 years or so when they are relatively healthy they are going to spend like crazy. In addition there is the retirement income covenant being rolled out encouraging superannuates to spend more of their superannuation rather than horde it.

Put the two together and what do you think is going to happen to spending across those age groups?

In don't think those in the policy arenas have grasped those issues and seem to be concentrating on when the older cohorts need aged care.

 

[sptrawler]

Posted in another thread.

The data is in: a generational shift of wealth is under way in Australia

Rising debt repayments alongside elevated savings rates are moving money from young to old, experts say, leaving younger people under growing strain

www.theguardian.com

I'm pretty sure what is said in this article is on the mark, but I doubt if most of us old superannuants will care much.

What young people who have a loan have to pay more when interest rates go up and old people who have paid their house off after 30 years and have some savings are spending their money. Wow it sounds like me and my parents 30 years ago.
The weird thing is these reporters get paid for stating the obvious.
In 30 years time they will be able to print exactly the same article, FW's

 

[SirRumpole]

What young people who have a loan have to pay more when interest rates go up and old people who have paid their house off after 30 years and have some savings are spending their money. Wow it sounds like me and my parents 30 years ago.
The weird thing is these reporters get paid for stating the obvious.
In 30 years time they will be able to print exactly the same article, FW's

Housing was a lot more available 30 years ago, the bigger the population the harder things get for home seekers.

 

[sptrawler]

Housing was a lot more available 30 years ago, the bigger the population the harder things get for home seekers.

Not really, my parents rented from the State Housing Commission and mining companies for 20 years after they came to Australia in the 1960's, then they bought an old weatherboard house in Collie. Mum past away last year with $12k to her name, after leading a full life and leaving peacefully as it should be.
The problem at the moment is, the Governments are allowing house prices in Sydney/Melbourne to spiral and allowing immigration to support it, this in turn is allowing the elites there to invest sight unseen everywhere else in Australia causing a price spiral everywhere.
We are just becoming a $hithole like every other capatalist country, where the elites get richer and the plebs become serfs.
Just what the left hate, as if. Lol

 

[Smurf1976]

Housing was a lot more available 30 years ago, the bigger the population the harder things get for home seekers.

True but only because development hasn't kept pace. It's the imbalance more than the actual numbers I think.