ACH transfers payments

There are many ways to verify online Automated Clearing House (ACH) payment details for transfers. Voided checks, micro deposits, pre-validations and account scores all validate ACH account payment details in one form or another. They also take more time than is necessary and typically can only verify something rather than adding key data to what the consumer has provided.

This is where open banking and open banking platforms make verifying account details and speeding up the ACH payment process simpler for everyone. Consumer-permissioned data pulled straight from bank accounts makes verifying accounts simple. It can also provide account details like account owner or balances that make facilitating payments easier and less risky for both sides of the transaction.

Finicity’s open banking platform provides a complete suite of data services with Finicity Pay to verify essential account details, owners, and balances that are needed to charge, get paid, or set up an account with confidence. Finicity Pay enables payments and validates funding sources. You can also seamlessly verify loan account details, including student loans, to detect eligibility for refinancing, loan consolidation, or to support employer student loan repayment and other benefit programs. 

This means that Finicity Pay both satisfies Nacha’s WEB Debit Rule but also speeds up the ACH payment validation process and enhances fraud protection. Finicity is a Nacha Preferred Partner, recognized for offering products and services that align with Nacha’s core strategies to advance the ACH Network.

Finicity’s instant verification solution takes advantage of Finicity’s open banking platform to use API connections to the many financial institutions in the US and Canada. Consumers permission the use of their account details which are then used for approved ACH payments, account creation or other permissible uses. The consumer can complete the verification process in minutes rather than waiting hours or days as in other solutions. Meaning their ACH transfer can process more quickly or they can get funds right into their new account.

Other ACH validation solutions either don’t provide the option for as much key data, only factor in account and routing number, or take much longer, up to a week in some cases. You may remember the days when you needed to provide a voided check to set up direct deposit transactions. Or to set up online accounts that are connected to your existing checking account you had to respond with how much was deposited into that checking account. There’s also pre-validating by providing information that is verified before the ACH transfer happens, which can take up to a week. Those days are over, thanks to Finicity Pay.

Some digital solutions are available but are limited either by what they provide, a score or likely probability that the account is good or has funds enough to cover the transaction, or only cover certain segments of the industry, as in providing details for accounts from certain FIs but not the industry as a whole.

Finicity’s instant verification can not only validate account details but can also provide account owner and account balance details to further mitigate risk and make ACH transfers easier.

Learn more about Finicity Pay or how it fits your needs by requesting a demo.

Nacha WEB Debit

One thing we’ve learned this past year – if we didn’t already know – is how we pay, get paid, or otherwise move money, is changing. One almost wonders what the fate of paper money will be in the future. Until that is sorted out, we’ll continue exploring ways to improve the money movement process. That’s where open banking comes in. Through open banking we’re able to introduce new tools that secure and simplify the money experience. One area enhanced by open banking is Automated Clearing House (ACH) payments. 

To that end, we’re very excited that industry innovator SWBC has chosen Finicity Pay™ for instant account verification of online Automated Clearing House (ACH) payments. This partnership simplifies the payment process while also satisfying Nacha’s new web debit rule, planned to take effect March 2021.

NACHA’s New Rules

Currently, ACH Originators of web debit entries are required to use a “commercially reasonable fraudulent transaction detection system” to screen web debits for fraud, according to Nacha’s website. This existing screening requirement will now be strengthened to make it clear that “account validation” is a solution designed to enhance fraud protection.

Specifically, originators of debits are responsible for validating accounts to ensure the account is legitimate and open prior to the first use of an account number or after changes to the account number by a customer. While the rule doesn’t require the account owner to match or be validated, Finicity Pay also enables companies to determine the account owner on file with the bank for heightened validation and further fraud prevention.

While there are many ways to validate accounts, Finicity’s open banking platform makes it easy to receive validation in real-time thanks to APIs and direct connections with financial institutions. Web debit originators don’t need to wait on manual verification, microdeposits, pre-notifications or any other service for dependable, accurate account verification.

How Finicity Pay Fits In

Finicity Pay will verify the essential account details, owners, and balances that are needed to charge, get paid, or set up an account with confidence.  As a complete suite, Finicity Pay enables payments and validates funding sources. It can also seamlessly verify loan account details, including student loans, to detect eligibility for refinancing, loan consolidation, or to support employer student loan repayment and other benefit programs. This means that Finicity Pay both satisfies Nacha’s web debit rule but also speeds up the payment validation process and enhances fraud protection. Finicity and SWBC are Nacha Preferred Partners, recognized for offering products and services that align with Nacha’s core strategies to advance the ACH Network.

SWBC provides financial institutions, businesses and individuals a wide range of services, including insurance, mortgages, wealth management, employee benefits, among others, and is a valued addition to our list of providers.To read more about this announcement, please read the press release here. And to learn more about Finicity Pay, check out our website at

income verification

A smooth verification of income process is crucial for mortgage lenders to satisfy customers and maintain efficiency. Unfortunately, with consumer expectations evolving and with better, more secure digital verification solutions on the market, manual verification simply doesn’t cut it anymore.

Today’s winning solutions streamline processes for everyone involved. More efficient workflows and solutions satisfy the expectations of digital consumers and increase ROI for lenders. Fintech and the digital mortgage it enables are both revolutionizing income verification and transforming risk management. Here’s how. 

What Is Income Verification? When Mortgage Lenders Use Proof of Income

Mortgage lenders need to accurately determine whether or not a potential borrower is a risk. Lenders use a series of verifications to assess that risk, including income verification. A lender will request a verification of income to check that a borrower is bringing in enough money to make their monthly mortgage payments. If a verification of income report shows that a loan amount is higher than a borrower can pay back, that borrower is less likely to receive a loan.

Lenders may complete income verification using a few different methods. Historically, lenders have requested manual documentation to verify a borrower’s income. This often involved delivering a paystub and the borrower’s most recent W-2 form along with bank statements. Today, more borrowers can submit documents electronically, via email, or through a lender’s online portal.

However, with digital mortgage solutions and digital verifications, specifically, on the rise, manual income verification is becoming a thing of the past. Instead of relying on paper documents, borrowers can authorize lenders to access their financial data, where they can quickly and easily verify income. 

It’s not just that manual verification of income is behind the times (even though it is). Manual verification, while a tried-and-true method for many lenders for a long time, presents concrete drawbacks and even risks that digital verification eliminates.

Manual verification simply takes longer. Hunting down relevant documents and generating friction with a frequent back-and-forth with borrowers takes time that drags out the origination process. Longer origination times mean lower ROI for lenders and less satisfaction from the consumer.

And that consumer satisfaction matters. In this digital economy, your borrowers expect increasingly streamlined processes. High-friction paper chases just don’t meet expectations anymore. And you don’t just want to meet expectations; you want to exceed them. Failing to meet today’s consumer expectations frequently results in fewer returning customers, fewer referrals, and all-around lower brand loyalty.

This is where fintech comes in.

How Fintech Streamlines Income Verification For Better Credit Decisioning

Fintech services remedy the problems inherent in manual verification with secure, convenient technology that streamlines processes for lenders and satisfies digitally-accustomed borrowers. Instead of requiring borrowers to dig up old documents, financial technology can verify income by directly accessing a borrower’s financial data. Fintech aims to simplify the mortgage lending process for everyone involved.

Digital verifications streamline mortgage lending by removing friction with borrowers, cutting origination times with fast processes, and moving borrowers more quickly through the conversion funnel. The most innovative technology also goes a step beyond simply removing friction with borrowers to also deliver a quick and secure user experience that simplifies the verification process.

Streamlining income verification isn’t just about speeding up the process. Digital verification solutions also address the risk- and fraud-related problems associated with manual verification. Physical documents received from borrowers can be unreliable. Inaccurate information leads to poor decisioning. Legacy technology that requires copy-pasting and re-keying leaves ample room for error. More risk and higher chances of fraud cost you more time and money in the end. Early Warning reports that “instead of getting information directly from financial institutions,” relying on manual verification “costs banks and lenders millions of dollars.”

Fintech ultimately improves credit decisioning with solutions that provide more accurate data and deeper insights into a borrower’s financial situation, all while cutting the time and risk associated with manual processes.

What’s Next? How The Latest Technology Will Better All Lending Platforms

The proliferation of financial data, and the open banking platforms that enable its access, are continuously evolving, especially amid the digital acceleration brought about by the pandemic. That latest technology and the innovative solutions it powers will improve lending platforms in every way, from streamlining the overall origination process to enabling more accurate, secure verifications from multiple data sources.

An abundance of consumer-permissioned data enables lending platforms to better serve consumers and increase ROI by easily and simply delivering data from multiple sources that may have been previously unavailable. Verifying employment gets easier when lenders can receive payroll and paystub information directly. Lenders that need to refinance or consolidate a loan can rapidly get the necessary loan details. The combined speed, accuracy, and security of these data connections, as well as increased access to additional data sources, enable mortgage lenders to develop the agility necessary to hone their competitive edge and adapt to future changes and challenges.

The Finicity Solution Is Transforming Risk Management For Traditional Banks 

The more accurate, more secure, and more convenient solutions enabled by fintech have the potential to transform risk management for traditional banks and lenders. But transforming risk management involves more than delivering better insights to mortgage lenders; it also involves meeting the digital borrower in their digital ecosystem with a solution that benefits the consumer as much as it does the lender. 

Enter Finicity Lend.

What is Finicity Lend?

Finicity Lend is a suite of fintech solutions that easily integrates into any lending platform and streamlines the verification process for mortgage lenders. Finicity’s open banking platform powers these solutions and places the consumer at the center of the verification process, which benefits everyone involved.

It goes like this: when it’s time for the borrower to verify their income, the lender kicks off the consumer permissioning process. The borrower then securely consents for the lender to access their financial data. Finicity then generates a “Verification of Income” report using data straight from the borrower’s financial institution. This guarantees the most accurate data, direct from the source. And to top it off, a verification process that could have taken weeks now takes minutes.

The Finicity Lend Verification of Income report includes:

  • Financial institution for each account
  • Up to 24 months of deposit transactions
  • Average monthly income
  • Historical and estimated annual income

How Finicity Lend Streamlines Income Verification and Transforms Risk Management

Finicity Lend is the answer to the flaws inherent in manual income verification. And it’s all thanks to data solutions that revolve around consumer empowerment. Using consumer-permissioned data, provided through Finicity’s open banking platform, Lend gives consumers more control over and transparency into their financial data and its benefits. And when the consumer is empowered, mortgage lenders reap the benefits, too.

Thanks to Finicity Lend’s data solutions, both mortgage lenders and borrowers can enjoy a streamlined verification process. Steve Smith put it best: “Once [consumer permissioning is] done, we’re able to gather all appropriate data across multiple accounts, rapidly analyze it and send a verification report to the lender. No papers. No multiple requests. No questions on validity of the data. All done in minutes, not weeks.”

Access to real-time data is the foundation of this streamlined process. Our verification solutions pull and analyze data straight from financial institutions. And all it takes is a report refresh to get immediate updates to reports. No more hindering the origination process with long periods of back-and-forth, hunting down bank statements and other documents. To top it off, our data intelligence layer analyzes financial data and ranks identified income streams with confidence scores, which both streamlines the decisioning process and provides more accurate data for better risk assessment.

Lend also streamlines the lending process and mitigates risk in the long-term. After all, fraud that comes back to bite lenders usually costs not just money, but time. Access to real-time data directly from financial institutions drastically reduces the chances of fraud when compared to verifications completed with manual verification. Our Lend solutions even compare transaction data with other source data (such as employer-provided data) for an additional layer of security.

In the end, streamlining verification of income with Finicity Lend enables mortgage lenders to close more loans more quickly. That enables greater agility, more space for more business, and more money saved in expenses. And with everything about Lend designed to put the consumer front-and-center, everybody leaves the lending process happy.

Thanks to Finicity Lend, you get the information you need for income verifications, and you get it fast. Your borrowers get a better, more empowering experience. You get a more reliable assessment of risk. And both of you can enjoy a streamlined income verification process. Learn more about Finicity Lend’s data solutions and request a demo to see streamlined income verification in action.


After decades–centuries, even–of inaccessibility, inclusion takes conscious effort. It’s more than demanding someone to pull themselves up by their bootstraps and force themselves through the door. Because sometimes that door is a wall and sometimes that wall lacks footholds and not everyone has a sledgehammer.

For many, unfortunately, inaccessibility is still familiar, despite notable strides society has made. And it doesn’t disappear when the media goes dark. Inclusion is a frequent consideration in workplaces and in college admissions. But what about in financial services?

The truth is, we can do better.

COVID-19 certainly hasn’t helped. But while some consumers are struggling to make credit payments, they still have money moving in and out of their accounts. The traditional risk assessment methods, however, will likely consider only the payments on their debt, effectively limiting who can get credit, even if they’re capable of repaying. That’s a missed opportunity.

By considering cash flow data in determining creditworthiness, lenders have the opportunity to improve financial inclusion as well as gain deeper insights into consumers’ financial habits. Here’s how.

Financial Inclusion and Insufficient Creditworthiness Assessment

Financial inclusion is the availability and equality of opportunities to access financial services. Many factors can influence financial inclusion, from income level, to community, to immigration status, and beyond. Recent research has also revealed that discrimination is still present in the financial services industry, and therefore hinders financial inclusion. Data collected through the Home Mortgage Disclosure Act (HMDA) found that lenders deny mortgages for Black applicants at a rate 80 percent higher than that of White applicants. 

While some of these denials may be attributed to outright bias, others may be a result of the wealth gap: “We know the wealth gap is incredibly large between white households and households of color,” said Alanna McCargo, the vice president of housing finance policy at the Urban Institute in a recent New York Times article. “If you are looking at income, assets and credit — your three drivers — you are excluding millions of potential Black, Latino and, in some cases, Asian minorities and immigrants from getting access to credit through your system. You are perpetuating the wealth gap.”

In addition to the racial discrimination that certainly (and frequently does) excludes consumers from access to financial services, so can young age. In fact, according to the Consumer Financial Protection Bureau (CFPB), almost 40 percent of credit invisible consumers are younger than 25. This means that young consumers beginning to make significant purchases lack access to many financial services, because traditional credit scoring models view these “invisible” and “thin-file” consumers as higher risk. Those traditional models, however, likely aren’t telling the whole story.

McCargo proposes a way forward, suggesting that “government regulators and banks in the secondary mortgage market must rethink risk assessment: accept alternative credit scoring models, consider factors like rental history payment and ferret our algorithmic bias.” There’s certainly room for the secondary mortgage market to augment the data it considers in risk assessment as well as hone their processes to eliminate bias and enhance inclusion. And the opportunity is also open to primary lenders to make the mortgage process more inclusive from the start, which will only widen the market for them by finding ways to serve more consumers. 

What Is Cash Flow?

Income, employment, assets, and credit history only provide a glimpse of a consumer’s financial story. Improving financial inclusion requires going beyond traditional credit scoring models to paint a more complete picture of a consumer’s financial habits.

Cash flow analytics breaks down a borrower’s credits, debits, and balances to reveal how money is moving in and out of consumer accounts. Understand that movement, understand how the borrower spends money. Understand how the borrower spends money, understand their risk. 

Gathering cash flow data requires open banking technology that both empowers consumers and enriches the decisioning process for lenders. It’s simple: a consumer agrees to allow a third party to access their financial data, selects the accounts to be accessed, and is educated on how the data will be analyzed and used. Then, in the case of cash-flow, the third party receives real-time data, via the open banking platform, which shows trending and balance insights, inflow and outflow transaction streams, a credit vs. debit analysis, and identification of potential transactions from other lenders.

The approach to cash flow analytics may differ from business to business. Cash flow data in almost any context will benefit both financial service providers and consumers. As an example, here’s what Finicity’s cash flow analytics can be used for: 

  • Automates underwriting processes, eliminating the time and costs of manual work
  • Provides up to 24 months of real-time, accurate, bank-validated cash flow data 
  • Easily informs cash flow forecasts and other financial models
  • Provides FCRA-compliant services on personal accounts
  • Enhances the customer experience with simpler, more convenient processes
  • Opens up new lending opportunities with a more comprehensive picture of financial history

How Cash Flow Improves Financial Inclusion

Cash flow analytics offer one layer of the alternative credit scoring model suggested by McCargo. Even credit invisibles and consumers with thin files who haven’t built a credit score through traditional methods can gain access to financial services with the clearer financial picture offered by cash flow data.

While many creditworthiness assessments only consider debt payments, cash flow analytics allow service providers to see every transaction in an account. With access to more data, providers can more accurately see how consumers handle finances, rather than relying solely on the potentially limited credit the consumer may have. This more holistic picture reveals whether a consumer is a low risk for a loan because they have room in their budget and can handle extra expenditures. And all the borrower needs is a checking account. 

For those with thin files like immigrants, consumers under 25, and those in low-income communities, cash flow offers an alternative perspective on a borrower’s financial history, one that may compensate for a lack of traditional credit history. For those who experience discrimination in lending, cash flow can compensate for the wealth gap by displaying a borrower’s financial responsibility. Using an alternative measure like cash flow can help 118 million consumers through real-time measurement directly from their bank accounts. Ultimately, by analyzing how consumers spend and save, expanding risk assessment can expand opportunity and inclusion.

In addition to fostering inclusion for the young and the discriminated, cash flow also enhances inclusion for consumers ostracized from credit access because their traditional credit history may not tell their whole story. Cash flow helps the consumer who had credit troubles years ago, but has increased their savings and is growing their discretionary income over time by managing their money correctly, but who the traditional creditworthiness models will inaccurately assess for seven years. Contrast this with the consumer who has a good credit score because they’ve made timely payments, but they’re drowning in debt and losing their discretionary income.

At a higher level, cash flow analytics, along with other open-banking solutions, can streamline lender processes with high-quality, comprehensive data that produces deeper insights and improves overall decisioning. Borrowers benefit from these solutions, too. In addition to the increased access to credit, consumers can also experience less friction and empowerment with more control over and greater literacy surrounding their financial data.

Improving financial inclusion for all will require change throughout the entire financial services industry. Cash flow is one step toward more inclusive risk assessment and fairer credit decisioning. Check out financial inclusion in action with Finicity’s Cash Flow analytics. And if you want to hear more about how cash flow improves financial inclusion, watch our co-founder and data science expert, Nick Thomas, talk about it here.

Account Verification ACH Payments Finicity Pay

I’m very excited to announce the newest addition to our open banking platform: Finicity Pay™, an integrated solution set that enables payments, account creation, and fraud mitigation. 

The move to digital continues to accelerate in the payment industry. Banks and fintechs are under pressure to transform processes across the payments ecosystem. They need to process a greater number of payments while giving consumers more flexibility without compromising security.

Finicity Pay transforms these challenges into opportunities for financial service providers to exceed the expectations of their digital consumers. Here’s how:

Enabling Payments for Today’s Digital Economy

Finicity Pay meets the needs of digital consumers and the digital payment ecosystem by enabling Finicity clients to verify the essential account details, owners, and balances that are needed to charge, get paid, or set up an account with confidence. With Finicity Pay, you can enable payments and validate funding sources. You can also seamlessly verify loan account details, including student loans, to detect eligibility for refinancing, loan consolidation, or to support employer student loan repayment or other benefit programs.

Instant Verification of User Data

Whether it’s setting up an account, enabling payments, or just verifying you’ve got the right person — Finicity Pay’s integrations allow for accurate, real-time, consumer-permissioned access to account details, such as the account owner name(s), address, balances, and account and routing transit number. Instant verification allows you to  get money moving faster than ever before. 

It gets better. Finicity Pay satisfies NACHA’s 2021 requirements for digital ACH transactions allowing for stronger anti-fraud controls. And, Finicity Pay’s data solutions enable faster, more confident transactions.

Increasing Security, Reducing Risk

With instant data verification, users can be confident they’re paying, charging, and setting up accounts with the right person or third party application. Finicity Pay provides all the information needed to help get payments and transfers sooner, while reducing the risk of fraud.  

We look forward to seeing how you’ll use Finicity Pay and its open banking capabilities to exceed your customers’ expectations. Do you have a question about Finicity Pay? Send us an email.  Download our Finicity Pay overview PDF. Or, request a demo online, to see Finicity Pay in action today.

digital transformation new normal

Some challenges are predictable. With more consumers growing accustomed to digital solutions in all industries, it’s not surprising that they would expect the same in lending, which could present a challenge for lenders lagging in digital adoption. Other challenges, however, sneak out of the shadows and force industries to adapt overnight, or fall drastically behind.

COVID-19 presented such a sudden, dynamic challenge to the lending industry. McKinsey & Company pointed out that “the conventional sources of data typically used in credit-risk assessments became obsolete overnight.” Lenders had to pivot to originating and processing loans remotely, requiring most of them to completely change their workflow without sacrificing the quality of their service. The work-from-home pivot also made manual verification infeasible and increased demand for digital verification and financial data access.

Many factors affect a lender’s ability to weather dynamic challenges. One solution continues to consistently produce positive results in today’s COVID era — digital adoption. Here’s how digital adoption gives lenders the efficiency and agility necessary to weather the pandemic and future dynamic challenges.

Today’s Dynamic Challenges

The pandemic presented a surprise test for lenders. Did they have the agility to quickly adapt to unprecedented changes in both the industry and in the life of customers? In a recent webinar with Brad Lando, Senior Vice President of Strategic Development at Guaranteed Rate, we discussed how COVID had affected his organization. “We sent about 6,000 employees home almost overnight amid record-breaking volume,” Brad said. “Everybody had to learn how to originate, process, and underwrite at home, with kids and dogs in the background.”

It’s important to note that the pandemic didn’t create the need for digital solutions that can be serviced and accessed from home. As Chris Backe, Consumer Engagement Specialist at Ellie Mae, noted in a recent webinar, “The whole digital mortgage movement is not really being imposed on lenders by technologists…it’s a movement from the borrower.” Fannie Mae backs up Chris’s comment with research stating that two-thirds of borrowers would be interested in a fully digital mortgage. Consumers want digital solutions that fit in their increasingly digital lifestyles. COVID simply accelerated digital solutions from a preference to a need.

The COVID-19 pandemic will pass, though its effects will linger. And while the pandemic dominates our news cycles and many a business meeting, there are other challenges that will come. Part of what made COVID-19 so impactful was its sudden and overwhelming changes, like a tsunami with no warning. Everything changed overnight, and a pandemic isn’t the only event that can create such a challenge. The best way to prepare for and weather a dynamic challenge with minimal setbacks is with the agility and efficiency offered by digital solutions.

What Does Digital Adoption Entail?

Digital adoption involves augmenting a traditional manual lending process with one or more digital solutions. And while you can of course dip your toe in the water by integrating a single solution at a time, the most successful digital adoptions are those that reshape the process from the ground up or start from scratch and build fully digitally native processes. 

The best digital adoptions also involve much more than simply asking borrowers to submit documents in an online portal. Instead of submitting two months of bank statements, for example, the consumer can simply permission access to their bank data and the lender can receive the information necessary to make their risk assessment.

McKinsey & Company put it best: “It’s not just about digitizing. Companies must also reimagine customer journeys to reduce friction, accelerate the shift to digital channels, and provide for new safety requirements.” Digital adoption isn’t just about integrating different solutions, it’s about rethinking how a lender interacts with and serves the consumer. A successful digital adoption will entail:

  1. Creating a holistic digital strategy from the top of the organization and on down. Leaders must take the reins on implementing digital strategy to ensure successful adoption in every level of the organization.
  2. Educating teams and getting everyone on-board. Show teams how they will uniquely benefit from digital adoption and make sure they understand how their work will change with this new strategy.
  3. Using accurate, reliable, secure technology. Digital lending only provides the highest ROI when it uses the best, most accurate data and secure connections.
  4. Being transparent and educational with consumers. This adoption is about them! Teach consumers how your workflow will change and how digital adoption will benefit from these changes.
  5. Being patient. Reshaping your workflow is a monumental change. But patience can yield unprecedented rewards.

Finicity understands that adopting digital verifications and completely changing a workflow can be intimidating, so we offer easy integration and best practices training, as well as account support, to ensure adoption goes smoothly. A successful adoption will then position a lender to weather current and future challenges.

Digital Adoption and Weathering Dynamic Challenges

Digital adoption enables a lender to be more agile when dynamic challenges come. In our discussion with Brad Lando, he told us that, thanks to digital validation tools, Guaranteed Rate has “barely skipped a beat.” In a time when hundreds of thousands of businesses are having to close their doors, digital adoption has enabled lenders like Guaranteed Rate to continue serving customers and “quickly adapt to the new normal.”

Guaranteed Rate isn’t the only organization whose agility has helped them weather the COVID-19 pandemic. McKinsey reported that “Companies that have led the way in adopting flatter, fully agile organizational models have shown substantial improvements in both execution pace and productivity. This has held true during the crisis, as we see a direct correlation between pre-crisis agile maturity and the time it has taken companies to launch a first crisis-related product or service.”

The agility of digital adoption comes primarily from its consumer-centric streamlined solutions and the resulting efficiency. For loan personnel, digital adoption enables document and file access from any location. Since multiple users can work on a loan at one time, digital adoption removes the bottlenecks in the process that may occur when one loan originator is waiting for paperwork from another. Digital solutions also cut processing and origination times by rapidly delivering accurate data and verifications. More efficiency means better scaling and greater growth.

Digital adoptions don’t enable organizational agility during a crisis just because of convenience. As we’ve said, the best solutions feel at home in consumers’ increasingly digital lifestyles and will feel right at home in loan personnel’s toolkit, as well. And when organizations provide solutions that place the consumer at the center, consumers stick around. “This whole driver behind digital mortgage,” said Chris Backe, “is to meet the borrower where they want to do business.” Meeting the borrower in their digital landscape will enable better returns for organizations during and following dynamic challenges. 

“As technology providers, as lenders, as loan officers,” says Backe, “as much as we can remove the barriers to home ownership: that’s really the holy grail of digital mortgage.” Removing barriers for homeowners with digital adoption also removes dead weight that may hold an organization back during times of dynamic challenge. 

To hear all about digital adoption in the mortgage space, you can listen to Brad Lando and Finicity’s Lisa Kimball in their demo at Digital Mortgage 2020, and you can check out Chris Backe, Waterstone Mortgage, and Finicity’s Brett Moore in their webinar from October. Then start your digital adoption by requesting a demo.


Some innovations come along and transform an entire landscape. eBay came and kicked “Classifieds” out of the newspaper. Apple revolutionized the mobile phone and changed how we connect and communicate. One innovation is changing how we experience money, and it’s reshaping financial services: open banking.

At its core, open banking is a philosophy–one centered on empowering the consumer even as it elevates the businesses that integrate its capabilities. Here’s your introduction to open banking and a glimpse into how it’s already benefiting both consumers and financial service providers.

What Is Open Banking? 

There are many aspects to open banking and you’re likely to find differing definitions depending on market and geography. But in its simplest form, open banking is empowering consumers to access, use, and benefit from their financial data. Enterprises leverage their big data to big effect. So why can’t individuals, families, and small businesses do the same? 

So what does this look like in practice? Open banking platforms require the use of an open application programming interface (API) that enables third-parties to connect to financial institutions and access a consumer’s banking, transaction history, and other financial data. To access that data, however, the consumer must give explicit consent to authorize the connection between the financial institution and the third party. This process is often called “permissioning.” Once a consumer permissions access to their data, the third party can access that data and the consumer can benefit from the third party’s services.

While there are variabilities in the technical implementation of open banking, its foundation is a secure environment in which financial data can be shared between parties, and where the consumer has the ability to control access to that data. In order to give the consumer the greatest control and security, the industry is moving toward more “tokenized” access, also known as “Open Authorization” or “oAuth” connections. oAuth connections involve providing a third party with a “token,” as opposed to the consumer’s credentials, to finalize the connection between the consumer and the third party.

Open Banking Is Consumer-Centric

Making the consumers the gatekeeper to their data empowers them with control over who has access to their financial data and what aspects of their financial data they want to share, as well as awareness of what the data is being shared for. What if, after permissioning, the consumer decides they don’t want the third party to access their data any longer? They can revoke their consent at any time. The control is always in the hands of the consumer.

Accelerating these benefits are direct data agreements (sometimes called data access agreements). These agreements define common rules for how the two parties communicate and exchange financial data – they typically include the data source, typically a bank, a data recipient, and a financial data aggregator. Not only is this the most secure way to access financial data, but it also builds a more convenient and streamlined financial services process, a process that benefits both consumers and financial service providers.

Consumer-centric technology and the goal to empower consumers come together to make open banking a platform for financial services innovation. When the consumer owns their data, and is empowered by that ownership, everyone wins.

Why Do We Need Open Banking?

We’re living in a hyper-connected world, yet consumers feel disconnected from what’s happening with their data. Yes, their data is scattered in silos across the web. But they don’t have a sense of ownership or control over it. And they’re not benefiting from it as much as they could.

Open banking is not just focusing on going digital. And it’s not simply creating a better experience. It’s about experiences that empower the consumer. Experiences that engage, expand, and enlighten. Experiences that put the consumer at the center. Engaging experiences where the consumer feels like an active participant. They feel fully connected. Through expanded control and increased access to their personal financial data, consumers will have more financial opportunity and possibilities not previously had or seen. From enlightenment comes understanding and rich insights. Simply put, consumers increase their financial literacy. This will lead to better financial decisions and outcomes.

Open Banking and Empowering Outcomes

Open banking platforms founded on consumer empowerment of course benefit the consumer, but they also elevate the financial service providers that access the permissioned data. 

Open Banking and Consumers

Streamlined Experiences

Open banking streamlines financial experiences by simplifying how consumers engage with their financial data. For example, open banking powers convenient peer-to-peer payment and personal financial management apps. These solutions simplify financial experiences as well as empower consumers with actionable insights for improving their financial health.

Accessing consumer data also reduces the paper-chasing and back-and-forth of traditional account opening, payments or lending and provides solutions that feel at home in consumers’ digital lifestyles. What used to take too much time digging through old files, now takes a few minutes and a simple permissioning experience. Everyone saves time–and patience.

Increased Transparency and Security

Open banking empowers consumers by enabling greater security and transparency. Thanks to the emergence of reliable, secure open API connections, consumers will access dashboards where they can review, enable, and disable data sharing connections. More transparency means that consumers stay more informed and can always have both hands on the data-sharing steering wheel. And when direct data agreements rely on secure oAuth technology, third parties access your financial data using a “token” that replaces login credentials. More security. Less hassle.

Greater Financial Inclusion

Open banking and direct data agreements do more than deliver secure convenience: open banking also expands access to credit and increases financial inclusion. Secure connections to financial data enables more credit access for the approximately 53 million U.S. consumers with a thin to non-existent credit file. With this expanded access, open banking supplements the traditional credit score to enable inclusion.

Improved Financial Literacy

With a clearer understanding of their financial health, consumers can improve their financial literacy and be empowered to make better financial decisions. Thanks to the transparency offered by open banking, financial data is no longer a mystery, but a tool for improving quality of life.

Open Banking and Financial Service Providers

Improved Consumer Loyalty

When financial service providers leverage open banking’s capabilities to build consumer-centric experiences, they improve loyalty between their brand and their customers. After all, empowering experiences do more than simply provide a one-time financial service; they enable consumers to improve their financial health. Why would a consumer go to a less consumer-centric, less secure, less innovative provider when they have your empowering, secure, and convenient open-banking-powered experience? Open banking and its accompanying data access also enable providers to continually respond to customer needs and innovate with new services or curate other services that will only further satisfy consumers and improve loyalty.

More Detailed Decisioning

Open banking reduces risk even further by delivering the most accurate real-time data. Data accessed through open banking platforms delivers detailed insights into a borrower’s financial story, providing access to even held-away accounts and complex analytics, like cash flow. A comprehensive financial picture thanks to accurate, real-time data leads to lower risk, better decisioning, and better returns for financial service providers.

Greater Agility

In a dynamic time for financial services (see, well, all of 2020), open banking also enables financial service providers to be more agile and adapt quickly to challenges. Digital solutions powered by open banking platforms require less time, less friction with consumers, and don’t shut down just because a pandemic washes through. These open banking capabilities give organizations the agility to adapt to challenges and continue serving customers.

Streamlined consumer experiences. Lower risk. Better decisioning. All of these lead to higher ROI for financial service providers. Like we said: everyone wins.

How Finicity Is Leveraging Open Banking to Empower Consumers and Providers

Finicity has always been determined to help consumers improve their financial health. Open banking is simply the best way to do that, regardless of where the consumer is in their financial journey. To keep the consumer in focus, our approach to open banking is guided by five core principles

  1. Control: the consumer should have control over how, where, and for how long their financial data is used.
  2. Access: the consumer should have access to their financial data at all times and across all account types.
  3. Transparency: third parties should be transparent about how they are using a consumer’s financial data.
  4. Traceability: consumers should be able to trace how their data is being used and dispute records. 
  5. Security: the consumer’s financial data should always be protected with secure connections and trustworthy parties.

Our open banking platform is built on our industry leadership in connectivity, data quality, and data intelligence. With connections to over 10,000 financial institutions, Finicity covers over 95% of the U.S. market. Remember those most-secure oAuth connections? Finicity leads the market in oAuth connections to most of the largest financial institutions in the nation. This all means more secure connections for more consumers and more service providers.

Getting the most out of open banking requires more than access to data. That’s why Finicity has built intelligence and deep learning into our analytics layer. That layer offers superior cleaning and categorization along with actionable insights like scoring, verifications, cashflow and more. Plus, we make it easy for businesses to integrate our platform into their workflow.

The open banking transformation may still be in its early innings, but it’s already changing the way we experience money and serve consumers. Check out open banking in action with our data solutions, which put the consumer behind the wheel of their financial health and lead financial service providers to better results.

Other Resources on Open Banking: 

American Banker: Open banking will bring banks and fintechs together

MuleSoft: How Financial Service Firms Can Benefit from Open Banking APIs

LendIt: The COVID Effect: Typical Credit Risk Data Became Obsolete Overnight. How Can Open Banking Fix it?

PwC: Open banking: US is next

American Banker: It’s time to go all-in on open banking

Finicity: How Open Banking Is Reshaping Creditworthiness

Deloitte: Executing the open banking strategy in the United States

open banking creditworthiness

Imagine if news only released on a monthly basis. Especially in a year like 2020, how much would you miss? You’d only get snippets of this year’s chaos. Never the whole story.

Traditional creditworthiness determiners are like this: they provide a glimpse of a borrower’s financial story, but it’s limited. Many in the credit industry are expanding their view and reshaping how they determine creditworthiness, opening the door to not only more complete understanding of financial health, but also to new markets, new borrowers, and an expanding credit economy.

COVID-19 may not have been the catalyst for transformation in the credit industry, but it certainly helped things along. In fact, A recent report from McKinsey & Company argued that COVID-19 has rendered data sources typically used to determine creditworthiness obsolete. McKinsey continued to point out that “the six- or 12-month-old data on which lenders relied in the past were no longer useful in evaluating the resilience of individual borrowers.” In response to this crisis, McKinsey suggested that “creative approaches to acquire and utilize high-frequency data are the order of the day.”

Our own report confirms McKinsey’s argument from a consumer’s standpoint. According to our research, 82 percent of consumers believe the current credit review process needs to change in order for responsible borrowers to prove their creditworthiness. This need for change likely stems from the belief that the current credit rating system fails to give lenders a complete picture of a potential borrower’s worthiness.

The key to adapting to these challenges? Open banking.

Let’s dig deeper into the forces demanding change, how the credit industry is responding, and how both consumers and lenders can benefit from the open banking data that’s reshaping how lenders determine creditworthiness.

Forces for Change

The number of credit invisibles and other consumers with thin credit files is on the rise. In fact, the Consumer Financial Protection Bureau (CFPB) found that at least 26 million Americans are completely credit invisible. That’s 26 million people lacking an accurate risk assessment when lenders rely only on the traditional credit score. Millions of Americans that may lack access to credit despite potentially good financial health. And this number doesn’t even consider the other 27 million consumers with a thin credit file that may also prevent credit access.

COVID-19 has only further complicated consumers’ relationship with credit. According to our report, 95 percent of consumers are concerned about their ability to either rebuild credit or take out a loan. Much of this concern comes from both uncertainty about factors that affect creditworthiness, and a widespread belief that traditional credit scores don’t accurately evaluate financial health and creditworthiness in real-time.

The Credit Industry Responds

To better serve those with little to no credit history, as well as those whose traditional credit score may have been affected by uncontrollable events, forward-thinkers in the credit industry have responded with innovative, data-centered initiatives. These solutions leverage open banking platforms to supplement credit scores with a more comprehensive understanding of a consumer’s financial wellbeing.

Experian Boost, for example, benefits consumers with little to no credit history as well as established borrowers who want to increase their FICO credit score. Consumers permission access to their bank accounts and Experian Boost uses Finicity’s open banking platform to directly access bank data. Boost then identifies on-time payments that aren’t regularly considered in a credit score, like phone payments, utilities, and even Netflix subscriptions. This additional data builds a more detailed picture of a consumer’s financial behaviors and helps them develop a positive payment history.

While Experian Boost may be the first service to include on-time payments in credit-score consideration, they aren’t the only business expanding the picture painted by the traditional FICO score. The UltraFICO™ Score is another innovation that uses data gathered through an open banking platform to consider the length your bank accounts have been open, the recency and frequency of your bank transactions, evidence of consistent cash on hand, and history of positive account balances. 

Altogether, this information helps a lender see a more comprehensive picture of a borrower’s financial habits. And where methods for improving credit scores can sometimes seem elusive, pulling the consumer into scoring empowers them to take actionable steps to improve their score, simply by changing how they use their bank accounts.

These and other industry transformations aren’t removing the credit score, they’re enhancing it. And open banking is the key.

How Consumers and Lenders Benefit from Reshaping Creditworthiness

Enhancing the credit score through open banking platforms has the potential to benefit everybody, but it’s most likely to benefit young consumers and immigrants, who tend to lack credit history or have thin files. In fact, industry estimates suggest that 5.5 million U.S. consumers are able to move from unscorable or subprime credit score bands into prime or near prime score bands when lenders consider telecom, utility, and other types of non-traditional credit data. 

The credit transformation will also particularly help those with lower income and marginalized communities who have historically been disproportionately affected by thin or nonexistent credit files. In the end, the credit transformation fosters financial inclusion, which can in turn challenge historic discrimination and create meaningful change in marginalized communities. 

The open banking platforms that enable credit industry innovations like Experian Boost and the UltraFICO™ Score provide access to consumer data without compromising the consumer’s control or security. Access to real-time data, via consumer-permissioning, directly from consumer accounts benefits everyone involved. Lenders mitigate risks and improve decisioning with access to real-time, comprehensive data that provides a clearer picture of a borrower’s financial wellbeing. Consumers benefit from greater control, greater transparency, and more access to credit.

By embracing open banking platforms in the credit industry and expanding how we determine creditworthiness, the resulting innovations can enable broader access to credit and empower both consumers and lenders to better weather future pandemics and disruptions. Learn more about how Finicity is capitalizing on its open banking platform and transforming credit decisioning with Finicity Lend.

MBA diversity and inclusion award

The Finicity team is honored to receive recognition from the Mortgage Bankers Association (MBA) as a winner of its fifth-annual Residential Diversity and Inclusion Leadership Award under the category of Market Outreach Strategies.

As part of MBA’s strategy and promotion of diversity and inclusion, the award recognizes member company initiatives that are specifically designed to increase outreach, marketing or products to attract customers from the industry’s fastest-growing market segments. The award commends the hard work, dedication and creativity of exemplary programs that focus on achieving organizational diversity and inclusion.


A Better Credit Review Process

For consumers to better assess and control their financial future and not be left in the dark over their own credit, they need greater transparency into and control over the data being used to determine their creditworthiness. The credit review process has notably left the most financially vulnerable populations at the greatest disadvantage, severely limiting their ability to participate in the credit market. 

The current pandemic has only exacerbated problems with this review process. In a recent study we conducted, 73% of those with a household income under $50,000 said these economic times and financial situations have made it difficult for them to keep up with bills and payments.


Open Banking: The Engine Driving Financial Inclusion

The credit-decisioning process needs to change to include more people in the traditional financial system. Finicity’s open banking platform is the engine that drives improvement in the lending process and has introduced several new products and partnerships to further the inclusion of more people in the traditional financial system. 

Leveraging the Finicity open banking platform’s robust data intelligence layer, Finicity Lend provides a new alternative data service, Cash Flow, that analyzes financial account data delivering a broad set of cash flow attributes. This gives lenders more accurate insights into a small business or individual’s creditworthiness. The Cash Flow analytics service digitizes and automates the capture and delivery of data that previously required significant combinations of manual and automated processes to extract and analyze. 

The use of this alternative data is supported by the Board of Governors of the Federal Reserve System, Consumer Financial Protection Bureau, Federal Deposit Insurance Corporation, National Credit Union Administration, and Office of the Comptroller of the Currency as referenced in their Interagency Statement.

In addition, Finicity’s open banking platform empowers consumers to control and share their data to improve their financial lives.  And now they can share their utility and phone payment data in order to boost their credit score.  Building on its leadership position with financial institution coverage, Finicity has new payroll data sources from a leading payroll provider to its open banking platform. Providing a direct connection to the payroll provider further enhances Finicity’s open banking platform’s ability to verify consumer-permissioned income and employment — critical to many lending use cases — with real-time, direct-from-the-source data.  

Expanding the types of data used to determine creditworthiness addresses longtime consumer concerns that have resurfaced recently due to the COVID-19 pandemic and resulting economic downturn. According to our recent study, 82% of consumers said they believe the current credit review process and criteria need to change to make it easier for responsible borrowers to prove their creditworthiness and increase access to loans.

Our open banking platform powers these new innovations as well as the vast majority of digital verifications of assets, income and employment through solutions and data offerings. These solutions empower consumers to control and benefit from their data — all at their fingertips — ultimately resulting in better financial outcomes for consumers and lenders.

We thank MBA for this honor and recognition. And to learn more about our solutions, check out our Finicity Lend solutions for credit decisioning on our webpage.  

Finicity Lend Open Banking Credit Decisioning

Today, we at Finicity are  pleased to announce the launch of Finicity Lend™, which brings in several new data services and capabilities to the Finicity open banking platform, creating a more expansive, integrated solution. This solution set enhances the current credit review system while also leveraging the tremendous advantages of open banking and consumer-permissioned financial data to better assess credit worthiness going forward. Fincity Lend’s new data services and capabilities include: Cash Flow, CRA Statements, CRA Transactions, Scoring Attributes, and use of payroll data enhancing our income and employment verifications.

Finicity Lend ensures greater efficiency and accuracy, better risk management, real-time insights, and enhanced credit-decisioning throughout the lending process. Our team wants to capitalize on credit decisioning and lending to drive forward more consumer-centric financial data and services, especially in this new era of open banking.

Cash Flow Analytics Offer More Context

The new Cash Flow service delivers a broad set of cash flow attributes to provide lenders with a more accurate and realistic view of a small-to-medium business (SMB) or individual’s creditworthiness. Utilizing the advanced data intelligence of our open banking platform, this digital service automates and streamlines the capture and delivery of data that otherwise requires significant combinations of manual and automated processes.

CRA Statements and Transactions Data Services Put Power in Consumers’ Hands

Lenders use all sorts of data in decisioning processes. With Finicity Lend, borrowers can easily permission lenders to use their financial data from their accounts  to verify information and garner insights for better decisioning. Finicity Lend delivers this data in accordance with the federal Fair Credit Reporting Act (FCRA) compliance requirements, ensuring that Finicity’s consumer-permissioned data meets the legal requirements of the FCRA. With intuitive permissioning and FCRA compliance, Finicity Lend offers the most consumer-centric and consumer-friendly approach to using  next gen financial data within the credit-decisioning process.

Payroll Gets a Front Row Seat

To further assess creditworthiness, Finicity has also added Automatic Data Processing (ADP) as the first of many new payroll data sources to our open banking platform. This supplies a connection to the payroll provider that offers direct-from-the-source data. Consumer-permissioned income and employment details are key information for a lender to obtain and the integration of ADP allows for easy, transparent access to this vital data. And it reduces the friction involved in manual verifications.

Digital Transformation Drives Open Banking

The goal of Finicity Lend is to make the credit review process faster, more accurate, and more efficient for lenders who offer all kinds of loans, including mortgage, auto, small business, personal, and others, to provide a more transparent and accurate view of a person’s creditworthiness.

In a recent survey that Finicity conducted, 82% of consumers called for an updated credit-decisioning process, stating they believe the current credit review process and criteria need to change to make it easier for responsible borrowers to prove creditworthiness. A majority of consumers stated that they would be willing to share current income information, payment history for utilities and other services, as well as rent history to give lenders a more accurate view of their financial standing and ability to pay back loans.

The new wave of digital transformation and open banking standards in the US are bringing about much needed change that Finicity is ready to tackle through our open banking platform.

To learn even more about the new Finicity Lend solution set, be sure to check out our virtual booth during LendIt Fintech USA 2020 from Sept. 29 – Oct. 1, or request a demo online.