Equifax® is expanding its open banking Data Solutions by introducing consumer-permissioned insights enabled through Mastercard Open Finance. This development gives lenders and fintechs more choices when selecting open finance providers to complement Equifax consumer credit files. Mastercard Open Finance’s Cashflow Analytics, Payment Risk Insights, and Transaction Report are now available to Equifax customers.
“As lenders and fintechs look to gain a more complete view of financial health, access to trusted, consumer-permissioned cash flow insights becomes increasingly important,” said Bart Willaert, Executive Vice President, Open Finance, Americas, Mastercard. “Our collaboration with Equifax will help organizations make faster, more confident decisions while unlocking new opportunities to expand access to credit.”
Equifax Strengthens Open Banking Solutions for Lenders
Equifax continues to advance financial inclusion with its full suite of Equifax Open Banking Solutions. These solutions leverage consumer-permissioned cash flow information to embed bank transaction data, attributes and scores into lending and portfolio management strategies.
This extra view into financial life enables consumers to build more complete personal finance profiles. It also allows financial institutions to evaluate applicants based on a wider set of financial information. This means lenders can safely extend credit to more people, which makes it easier for the 76.1 million thin-file or credit-invisible consumers in the U.S. to get approved.¹
Equifax’s enhanced cash flow data solutions convert complex bank transaction data into actionable credit insights. These insights are useful in real-time analysis and can be integrated into existing underwriting systems. It enables lenders to include relevant financial information in their credit decision processes.
The expanded Data Solutions offering features three solutions that address varying lending needs.
Cashflow Analytics: This solution analyzes credits, debits and account balance for a period of up to 24 months. It creates cash flow characteristics that lenders can use in their underwriting. This gives financial institutions more information to help them understand the financial situation of applicants.
Payment Risk Insights: This solution delivers a score to help lenders forecast repayment risk. It also helps you spot the early warning signs of repayment stress. This means lenders are better able to understand potential risks when assessing credit applications and managing existing portfolios.
Transaction Report This offering delivers over six months of cleansed, categorized and enhanced bank transaction data. Lenders may use this information to build flexible models for underwriting and decisioning. Also, detailed transaction records provide a number of different ways to assess cash flow.
Equifax Offers More Flexibility to Financial Institutions
Different financial institutions have varied ways of operating, which can make one cash flow data provider ineffective for everybody. Equifax plans to deal with this problem by allowing its clients to select the open finance provider of their choice.
“Financial institutions have diverse operational needs, meaning a single cash flow partner does not necessarily fit each organization’s needs. Our goal is to give our customers the flexibility to choose the open finance provider that works for them and provide that data alongside Equifax credit and alternative data to make confident decisions that can open up new opportunities for consumers,” said Jacob Osborne, Senior Vice President and General Manager, Fintech and Payments at Equifax.
Each of these (personal loans, credit cards and commercial credit lines) have different cash flow data requirements. Each has its own features, its own risk management, its own decision criteria. Equifax provides lenders and open finance providers with the ability to link to solutions and products that best match their customers’ needs, systems and strategies. This approach optimizes speed, reduces complexity and time-to-value. It also enables lenders to make more informed credit decisions across product types with cash flow data and Equifax’s credit and alternative data.
With cash flow data, lenders can complement Equifax credit and alternative data to better understand their approach to various credit products and make more informed lending decisions. This allows them to customize their approach for each of their credit products. It also gives them greater confidence in evaluating their customers’ applications and innovating more responsibly to better meet their customers’ needs.
Mastercard Partnership Enables More Access to Credit
In a statement, Mastercard also noted the growing importance of consumer-permissioned financial information in the lending process. As lenders and fintechs alike seek ways to better understand the financial wellness of consumers, access to cash flow insights can be critical.
The collaboration enables Equifax customers to employ more methods for incorporating bank transaction data into their lending processes. In addition, it provides financial institutions with the opportunity to make quicker, more informed decisions while still considering a borrower’s overall financial situation.
Lenders who want to leverage more detailed cash flow attributes or scores generated by bank transaction data can choose from a variety of Equifax Open Banking Solutions that enable them to select the options that best suit their needs. With this approach, financial institutions can supplement traditional credit data with consumer-permissioned insights to better evaluate applications from borrowers with limited credit history or other characteristics that may make it harder for them to qualify for credit. The Open Finance solutions from Mastercard are provided by Finicity Corporation, a Mastercard company. ¹ Equifax data and analytics.
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News Source: PRNewswire.com
