Experian Introduces Digital Tool Supporting Financial Inclusion with Open Banking Insights

May 13, 2024 2:08 am
Complete Range of Receivables Management Solutions
Collections Intelligence
Defense and Compliance Attorneys


Source: site

image

Experian announced the launch of Cashflow Attributes, a solution to help expand fair and affordable access to credit, particularly for thin-file and credit invisible consumers.

With over 900 income, cashflow and affordability attributes, Experian’s cashflow insights are available now and “allow lenders to seamlessly integrate banking data into their decision-making.”

A consumer’s credit report is the most effective “means to assess lending risk; however, nearly 106 million U.S. consumers are unable to secure credit at mainstream rates either because they are credit invisible, unscoreable by conventional credit scores, or have a subprime or below credit score.”

Layering traditional credit report data “with cashflow insights helps create a more detailed view of a consumer’s financial health and creditworthiness for lenders and can provide more opportunities for consumers.”

Financial inclusion: 42% of adults lack “a conventional credit score in a range that typically grants access to credit at standard rates.”

Cashflow Attributes, which “leverages checking and savings account information, offers a more comprehensive view of an individual’s financial profile.”

Using traditional credit data “with lender-obtained cashflow information may unlock opportunities for consumers who may not have qualified if a lender was using traditional credit data on its own.”

Enhanced predictive accuracy: While cashflow insights “are predictive on their own, when viewed with traditional credit information from Experian and expanded Fair Credit Reporting Act data, Cashflow Attributes can boost predictive accuracy by up to 20%[3] – allowing lenders to drive revenue growth while mitigating risk.”

Consumer willingness: Experian‘s research shows 71% of consumers “are willing to share their banking information if it increases their chances of credit approval.”

Scott Brown, group president Experian Financial and Marketing Services, said:

“Supporting financial inclusion and creating an equitable path to credit is ingrained in our DNA. We believe banking information holds untapped potential and that our new Cashflow Attributes represent an exciting step forward that can easily be integrated into lending decisions. As we look ahead, we will continue to leverage our core credit data, new data elements and our analytics expertise to unlock new opportunities for both consumers and businesses.”

How Cashflow Attributes works:

  • Lenders requesting Cashflow Attributes provide Experian with depersonalized transaction information from their existing customers or with consumer-permissioned account information from other banks.
  • Next, Experian, as a service provider to its lender clients, analyzes and categorizes the information using its proprietary categorization model.
  • And in seconds, Experian delivers the transaction categories and predictive attributes back to the lender.

Experian’s proprietary categorization model “can also be leveraged independently by lenders to gain deeper insights, drive more personalized experiences, and help improve financial management tools.”

© Copyright 2024 Credit and Collection News