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63% of US workers live paycheck to paycheck, and often don't have access to the money needed for basic necessities. They turn to payday loans, family, friends, and more. Consumers are looking to financial institutions to provide new and better financial services - from earned wage access to cash flow based loans. With a continued threat of a potential recession, banks and lenders are looking to stay best positioned throughout the year and for ways to lower their default risk, increase overdraft protection, increase profitability, and more.
Projected earnings, a feature within Pinwheel Earnings Stream, uses historical pay and shifts to project future earnings for future pay periods. With this feature, banks and fintechs are armed with powerful insights to power their new products, whether they are supplementing earned wage access with additional increased cash distributions or increasing overdraft protection.
Before diving into how projected earnings works, here’s a quick reminder on Earnings Stream.
Pinwheel Earnings Stream provides clients with actionable, consumer-permissioned insights into customers' earnings. Sourced from payroll systems, they can leverage these insights to reduce risk, boost engagement, power new financial products, and lower acquisition costs.
Earnings Stream has 4 core features:
Accrued earnings
Wages the customer has earned so far in the current pay period.
Historical cash flows
Customers’ past cash flows based on all historical paystubs.
Projected earnings
Using historical pay and shifts, we can project future earnings for the current pay period, next couple of months, and beyond.
Future pay dates
Based on past pay dates we can predict future pay dates.
For this blog post, we’ll focus on projected earnings.
Projected earnings are predicted earnings over a period of time in the future. It includes future expected and scheduled work.
Projected earnings can be used to provide customers with more confidence when providing earned wage access, cash flow underwriting, financial education and more! By providing our clients with a strong signal on how their customer will be paid over the next month, they can underwrite more confidently, be more comfortable providing a larger cash advance and help a customer plan out their budget over the next few months.
To determine future earnings of a customer we use machine learning, leveraging comprehensive paystubs data and historical pay information for each individual user and across the entire Pinwheel platform. Pinwheel uses our unique connectivity to over 1,700 payroll providers, which covers 80% of US workers, to provide a real-time projection of future earnings.
Pinwheel is the only payroll API that provides projected earnings with a clean, easy-to-implement API. Pinwheel doesn’t just deliver earnings data and leave it up to you to complete the rest of the puzzle.
Contact us to learn more about how Pinwheel Earnings Stream can provide insights into your customer’s income.
