The Digital Finance Cooperative Research Centre’s landmark review for ASIC flags three shifts reshaping consumer and SME lending:

1.  Automated decisioning

2. Alternative data, and

3. Real-time affordability

 

In May 2026, ASIC published a review of innovation in financial technology and RegTech.  It examines credit, insurance, payments, wealth management, and regulatory technology across seven major global jurisdictions. Importantly, its findings have direct implications for every non-bank lender operating in Australia today.

This post focuses on Chapter 3: Consumer and SME Credit.

Specifically, it examines the issues most relevant to lenders assessing affordability, verifying income, and making credit decisions in an increasingly automated, data-driven market.

The headline finding is clear. Automated credit decision systems, alternative data sources, and real-time affordability assessments are no longer emerging technologies.  Instead, they are becoming the operational baseline.

As a result, Australian non-bank lenders that have not yet moved in this direction risk falling behind the innovation curve.

Furthermore, they may be accumulating regulatory and commercial risk.

WHY THIS REPORT MATTERS FOR NON-BANK LENDERS

ASIC’s commissioned analysis notes that automated credit decision systems speed up applications, use diverse datasets, and update risk assessments in real time (Section 3.1). 

For non-bank lenders, this report should be read as a forward-looking compliance and commercial planning document – not just a technology overview.

The report identifies three specific trends reshaping consumer and SME credit globally, all of which are directly relevant to Australian non-bank lenders.

The report defines alternative data as “non-traditional information, such as transaction data, platform activity, digital footprint data and real-time payment information, to assess borrower risk” (Section 3.1).

It cites research showing that this type of data can be as predictive of default as traditional credit scores. Lenders using it can extend credit to borrowers that traditional models would have declined (Berg et al., 2020; Di Maggio and Yao, 2021).

For Australian non-bank lenders, bank transaction data is the most accessible and highest-quality alternative data source available.

Under Australia’s CDR, lenders can access this data via Open Banking with customer consent to deliver real-time, verifiable views of income, spending, and financial position.

The GoLend Report from MogoPlus is built on this data layer. Rather than asking borrowers to produce payslips or bank statement PDFs, it analyses consented bank transaction data to verify income, categorise expenses, and produce an affordability assessment – automatically, at the point of application.

The report states that automated credit decision systems help lenders process applications more quickly. They also incorporate larger and more diverse datasets and update risk assessments as borrower circumstances change.

The report further notes that digital lenders increasingly use these systems to streamline underwriting, improve operational efficiency, and deliver faster credit decisions. (Section 3.1).

This is not a description of future-state technology. It is a description of what leading lenders are already doing.

The Australian equivalent of this model is available today. The GoLend Report delivers automated affordability and serviceability outputs from real transaction data. It replaces manual bank statement review – still central to most non-bank lending workflows.

The report highlights a critical regulatory issue that many lenders have not yet considered.

As automated systems scale, regulators increasingly expect decisions to be explainable and open to challenge.

The US Consumer Financial Protection Bureau has made clear that “creditors using complex algorithms must still provide specific and accurate reasons for adverse actions” (Section 3.2). ASIC’s own report identifies “explainability of adverse decisions” as one of the most significant issues for Australian credit innovation (Section 3.1).

This matters for lenders choosing their technology partners. A credit decisioning layer without an auditable logic trail creates compliance risk.

It also increases the risk of consumer harm under Australia’s responsible lending obligations.

THE FIVE-YEAR OUTLOOK: WHAT IS LIKELY TO SCALE

The report’s five-year outlook for consumer lending (Section 3.4) identifies three developments likely to reach mainstream adoption by 2031:

1. Embedded lending.

This is especially true in merchant, platform, and software ecosystems that already have the transaction data and distribution access needed to originate credit at low cost.

2. Automated credit decision systems.

These are expected to spread, but the pace and form of deployment will be shaped by explainability, fairness and accountability constraints.

3. Regulatory distinction between BNPL and mainstream consumer credit.

Lenders that have not yet automated income verification and affordability assessment are relying on processes that will eventually need to be replaced.

The question is whether that replacement happens proactively and on their terms.

Alternatively, it may happen reactively under regulatory or competitive pressure.

Section 3.5 of the report outlines specific issues for ASIC and lenders to consider. Two are particularly relevant:

1. Lenders must adequately assess repayment capacity
2. Develop clearer expectations on explainability and model governance

Taken together, these points reinforce a clear direction.

Lenders need robust, explainable, and automated affordability assessment systems as a core part of their credit process, not as a future enhancement.

The GoLend Report is MogoPlus’s single credit intelligence product for Australian lenders.

It is designed for the exact operating environment described in ASIC’s report. In this environment, alternative data (BANK TRANSACTION DATA) replaces submitted documents.

The automated categorisation and analysis based on 12+ years and over $10b in bank transactions replaces manual reviews.

And explainable, auditable outputs support responsible lending compliance.

• Income verification: Confirmed from real bank transaction data, not payslips or tax returns. Verifiable, timestamped, auditable.
• Affordability and serviceability assessment: Derived from actual spending patterns, not declared expenses. Gives lenders a true picture of borrower capacity.
  

• Expense categorisation: Every transaction categorised and enriched, with a lower rate of uncategorised transactions than alternative providers – meaning a more complete financial picture for the credit decision.

• Financial hardship detection: Identifies vulnerability signals in transaction history that support responsible lending obligations under NCCP.
• Financial position analysis: A full snapshot of the borrower’s financial health at the point of application.

The GoLend Report is API-native and integrates directly with CDR-accredited Open Banking data feeds. It is built for the automated credit workflow that ASIC identifies as the future direction of Australian consumer and SME credit.

Australian Tier 1 lenders, mutuals and non-bank lenders including Westpac, CMCU and Volkswagen are among those using MogoPlus’s credit intelligence infrastructure.

Fintech lenders including Loan Options AI and One Click Life have used it to automate high-volume approvals – replacing manual bank statement review with automated outputs delivered in seconds.

If you are a non-bank lender, credit union, or fintech lender still relying on manual bank statement reviews or document-based income verification, ASIC’s 2026 report indicates it may be time to review your credit assessment infrastructure.

The technologies described in the report, including alternative data, automated decisioning, and real-time affordability assessment, are no longer aspirational in the Australian market.

It is available, it is affordable, and it is increasingly what regulators will expect to see in responsible lending frameworks.

To see how The GoLend Report works and whether it fits your origination process, start your free trial and test our credit insights.

MogoPlus is an Australian data categorisation and enrichment platform. The GoLend Report provides income verification, affordability analysis, and credit decisioning for non-bank lenders, fintechs, and BNPL providers across Australia.

ASIC / Digital Finance Cooperative Research Centre (DFCRC), Innovation in Financial Technology and RegTech: A Landscape Review, May 2026. https://download.asic.gov.au/media/bi1bhzor/innovation-in-financial-technology-and-regtech-published-21-may-2026.pdf

Berg, T., Burg, V., Gombović, A. and Puri, M. (2020) ‘On the Rise of FinTechs: Credit Scoring Using Digital Footprints’, Review of Financial Studies, 33(7), pp. 2845–2897.

Di Maggio, M. and Yao, V. (2021) ‘Fintech Borrowers: Lax Screening or Cream-Skimming?’, Review of Financial Studies, 34(10), pp. 4565–4618.

Bartlett, R., Morse, A., Stanton, R. and Wallace, N. (2022) ‘Consumer-Lending Discrimination in the FinTech Era’, Journal of Financial Economics, 143(1), pp. 30–56.

Australian Government (2024) Consumer Data Right Strategic Review, July 2024.

APRA, Prudential Standard CPS 230: Operational Risk Management (July 2025 effective date).

ASIC, Report 798: Beware the Gap — Governance Arrangements in the Face of AI Innovation (October 2024).