Finicity’s open banking platform delivers consumer-permissioned data, the foundation of a more comprehensive, more accurate risk assessment. Lenders need to enhance their assessment capabilities in order to remedy these five problems in today’s credit decisioning market:
- Traditional credit scoring is a lagging indicator of financial health
- Credit scores do not follow individuals across borders
- 62 million Americans have a thin credit file or are credit invisible
- Millennials are lagging behind other generations in building credit
- The COVID-19 pandemic has exposed problems with traditional credit scoring
Open banking data augments the foundation of credit histories and credit scores by providing real-time insights into cash flow, stable income and the actual room in someone’s monthly budget to afford a loan or a new purchase.
Millions of Americans have thin credit files meaning they don’t have enough data in the credit bureaus to even create a score. By looking at data from their bank account, lenders can determine if they are able to to pay back a loan based on income and expenses, not the lack of data.
Above all, consumer-permissioned data helps to empower consumers with control over their data, access to better financial products and a simple way to connect with fintech apps or financial services.
If you’re ready to learn how Finicity’s open banking platform can improve your credit decisioning experience for you and your borrowers, schedule a demo today.