Tag: cash flow data

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Experian and Plaid are teaming up to power smarter, faster, and more inclusive lending — fueled by real-time cashflow insights. The financial landscape is becoming more dynamic and digitally connected. Consumers are increasingly turning to digital platforms not only to pay bills and track spending, but to better understand their financial health, monitor their credit standing, and plan confidently for the future. This evolution presents a timely opportunity for innovation in underwriting — one that empowers consumers to take control of their financial futures and enables lenders to make faster, smarter, and more inclusive decisions. What happens when the leading global data and technology company joins forces with the largest open banking network in the world? Experian and Plaid are coming together to solve some of the most pressing challenges lenders face, bringing cashflow insights into credit decisions, seamlessly. Smarter lending: Elevating the credit decision process For lenders seeking a holistic view of borrowers to make faster, more informed decisions, this new collaboration is a game-changer. Experian and Plaid are combining real-time, unmatched cashflow data and analytics to help lenders improve decisioning, pinpoint risk precisely, and drive financial inclusion. This marks a pivotal shift in how credit is assessed, moving us toward faster, and fundamentally smarter lending decisions. This strategic collaboration delivers real-time cashflow insights in a comprehensive solution, built on core principles designed to directly enhance your lending capabilities: Speed and simplicity: Driving efficiency with seamless integration In today’s fast-paced financial landscape, efficiency in underwriting isn’t just an advantage; it’s a necessity. Our combined solution prioritizes speed and simplicity by offering easy integration through APIs. This ensures fast access to meaningful risk insights, streamlining your workflows. Imagine easily leveraging real-time cashflow risk insights directly into your existing processes for faster and smarter lending decisions. This is about delivering modern infrastructure that allows you to move at the speed of today's market, empowering your business to expand with confidence. Broader visibility: Unveiling a holistic consumer view Traditional credit scores are a reliable, crucial tool for measuring a borrower’s creditworthiness. When coupled with real-time cashflow data and risk insights, lenders are empowered with broader visibility, bringing to light a more holistic view of a borrower’s current financial reality and opportunities that may have been missed. You gain a comprehensive consumer financial picture, allowing for more precise identification of both strong financial capacity and potential risks, ultimately helping you target and acquire customers who align with your growth objectives. Smarter decisions: Enhancing models with combined intelligence The power to make truly informed decisions hinges on the quality and depth of your data. Without robust insights, risk models can be limited, impacting precision and speed. With Experian's advanced cashflow analytic capabilities and Plaid's streamlined access to real-time cashflow data via Consumer Report, you can enhance your risk assessment for smarter decisions. This synergy empowers financial institutions to expand credit access and uncover hidden risks, leading to more precise underwriting. It’s about leveraging advanced analytics in real-time to drive improved decision-making and build stronger portfolios. More inclusive lending: Expanding access, responsibly A significant challenge in lending is ensuring access for all creditworthy individuals, including those with limited traditional credit histories who may be overlooked. This represents an untapped market and a vital opportunity for responsible growth. Our solution champions more inclusive lending, enabling you to reach underserved communities and empower consumers who demonstrate strong financial capacity. This not only fosters stronger portfolios but critically helps your business grow by efficiently acquiring customers across a broader spectrum. Proven trust: Lending with confidence In the financial industry, the bedrock of any solution is trust – in the data, security, and partners. Lenders require unwavering confidence in the tools they adopt. This collaboration is built on proven trust, leveraging the reach, reliability, and security of two of the most trusted names in financial services. Experian’s expertise in credit data and consumer protection, combined with Plaid’s modern infrastructure and trusted open banking network, offers unparalleled assurance. You can securely integrate these powerful insights, knowing you are backed by industry leaders committed to best-in-class security and compliance, enabling your business to grow with confidence without compromise. Smarter lending starts now The evolution of underwriting demands a more dynamic, inclusive, and precise approach. With Experian and Plaid, you're not just adapting to change; you're leading it. Empower your organization to approve more borrowers, reduce risk more effectively, and make smarter, faster decisions for sustainable success. Ready to transform your lending strategy? Learn more about how to bring cashflow insights into your credit decisions seamlessly. Learn more

Published: June 11, 2025 by Isaac Kim

Open banking has been leveraged for years in the U.S. The anticipated U.S. regulation under section 1033 of the Dodd-Frank Act, combined with the desire to expand lending universes, has increased interest and urgency among financial institutions to incorporate open banking flows into their workstreams.  With technological improvements, increased data availability, and increasing consumer awareness around the benefits of data value exchange, financial service providers can use consumer-permissioned data to gain new insights. For example, access to bank account transactional data, permissioned appropriately, provides important attributes into risk, spend and income behaviors, and financial health, while equipping institutions with intelligence they can harness to help meet various business objectives.  Current state of open banking Open Banking use cases are extensive and will continue to expand as access to permissioned data becomes more common. Second chance underwriting, where a lender retrieves additional insights to potentially reverse the primary declination, is the most prevalent use case in the market today.  Where a consumer may have limited or no credit history, this application of cashflow attributes and scores in a decisioning flow can help many consumers access financial services where they cannot be fully underwritten on credit data alone.  And it is not just consumer behavior and willingness to permission their data that will accelerate open banking in financial services. The technology enabling access, security, standardization, and categorization is equally critical. New and existing players across the ecosystem are rolling out new solutions to drive results for financial institutions.  The benefits of open banking are vast as highlighted recently by Craig Focardi, Principal Analyst at Celent: “The final adoption of the CFPB’s proposed rule under Section 1033 will accelerate open banking in the US,” said Focardi. “Although open banking is operating effectively under existing consumer protection/privacy and related laws and regulations, this modern opening banking rule will enhance consumer control over their data for privacy and security, help consumers better manage their finances, and help them find the best products and banking relationships. For financial institutions, it will level the competitive playing field for smaller financial institutions, increase competition for customer relationships, and incentivize all financial institutions to invest in technology, data, and analytics to adopt open banking more quickly.” Despite the wealth of information that open banking can offer, institutions are at varying stages of maturity when it comes to using this data in production, with fintechs and challenger banks leading the way. However, most banks are researching and planning to take advantage of the insights unlocked through open banking – particularly cashflow data.  But why is there not wider adoption when this ‘new’ data can offer such rich and actionable insights?  The answer varies, but it is top of mind for risk officers, analysts and marketers. Some financial institutions are worried about application drop-off as consumers move through a data consent journey. Others are taking a wait-and-see approach as they are concerned about incorporating open banking flows only to see regulation upend the application of permissioned data.   Regardless of readiness, most organizations are in various stages of testing new permissioned data sources to understand the implications. Experian has helped many financial institutions understand the power of consumer-permissioned data through analytics and specific tests leveraging client transactional data and our cashflow models. On aggregate, we see cashflow data perform well on its own in determining a consumer’s likelihood of going 60 days past due over 12 months; however, it is best used in combination with traditional and alternative credit data to achieve optimal performance of underwriting models.   But what about consent? Will consumers be open to permissioning their data?  From our research, we see that consumers are willing to give permission if the benefits are explained and they understand how their data will be used. In fact, 70% of consumers report they are likely to share banking data for better loan rates, financial tools, or personalized spending insights.1 Experian reveals new solutions for open banking We at Experian are excited about the benefits open banking can provide, including: Giving more control to consumers: Consumers are hungry for more control over their data. We have seen this ourselves with Experian Boost®. When the benefits of data sharing are properly explained, and consumers can control when and how that data is used, it is empowering and allows consumers the potential to unlock new financial opportunities.   Improving risk assessment: As mentioned above, analysis shows that cash flow data (transactional open banking data) is very predictive on its own. Adding our credit data delivers even greater predictability, enabling lenders to score more consumers and offer the right products, services, and pricing.   Augmenting existing strategies: Open banking is not a new strategy; it augments and improves many existing processes. Institutions do not need to start something from scratch; they can layer incremental data into existing processes for an improved risk assessment, deeper insights, and a better customer experience.  Open banking is not a new strategy; it augments and improves many existing processes. Institutions do not need to start something from scratch; rather, they can layer incremental data into existing processes for an improved risk assessment, deeper insights, and a better customer experience.  We’re helping institutions unlock the power of open banking data by transforming transaction data into precise categories, a foundational component of cashflow analytics that feeds into the calculation of attributes and scores. These new Cashflow Attributes can be easily plugged into existing underwriting, analytic, and account management use cases. Early indicators show that Cashflow Attributes can boost predictive accuracy by up to 20%, allowing lenders to drive revenue growth while mitigating risk.2 Open banking is emerging in the industry across various use cases. Many are only just realizing the potential insights and benefits this can have to consumers and their organizations. How will you leverage open banking? Learn more about how we're helping address open banking 1Atomik Research survey of 2,005 U.S. adults online, matching national demographics. Fieldwork: March 17-21, 2024. 2Experian analysis based on GINI predictability. GINI coefficient measures income or wealth inequality within a population, with 0 indicating perfect equality and 1 indicating perfect inequality, reflecting predictive capability.

Published: July 8, 2024 by Ashley Knight

Open banking is revolutionizing the financial services industry by encouraging a shift from a closed model to one with greater transparency, competition, and innovation. But what does this mean for financial institutions, and how can you adapt to this new landscape, balancing opportunity against risk? In this article, we will define open banking, illustrate how it operates, and weigh the challenges and benefits for financial institutions. What is open banking? Open banking stands at the forefront of financial innovation, embodying a shift toward a more inclusive, transparent, and consumer-empowered system. At its core, open banking relies on a simple yet powerful premise: it uses consumer-permissioned data to create a networked banking ecosystem that benefits both financial institutions and consumers alike.  By having secure, standardized access to consumer financial data — granted willingly by the customers themselves — lenders can gain incredibly accurate insights into consumer behavior, enabling them to personalize services and offers like never before. How does open banking work? Open banking is driven by Application Programming Interfaces (APIs), which are sets of protocols that allow different software components to communicate with each other and share data seamlessly and securely. In the context of open banking, these APIs enable: Account Information Services (AIS): These services allow third-party providers (TPPs) to access account information from financial institutions (with customer consent) to provide budgeting and financial planning services. Payment Initiation Services (PIS): These services permit TPPs to initiate payments on behalf of customers, often offering alternative, faster, or cheaper payment solutions compared to traditional banking methods. Financial institutions must develop and maintain robust and secure APIs that TPPs can integrate with. This requires significant investment in technology and cybersecurity to protect customer data and financial assets. There must also be clear customer consent procedures and data-sharing agreements between financial institutions and TPPs. Benefits of open banking Open banking is poised to create a wave of innovation in the financial sector. One of the most significant benefits is the ability to gain a more comprehensive view of a consumer’s financial situation. With a deeper view of consumer cashflow data and access to actionable insights, you can improve your underwriting strategy, optimize account management and make smarter decisions to safely grow your portfolio.  Additionally, open banking promotes financial inclusion by enabling financial institutions to offer more tailored products that suit the needs of previously underserved or unbanked populations. This inclusivity can help bridge the gap in financial services, making them accessible to a broader segment of the population. Furthermore, open banking fosters competition among financial institutions and fintech companies, leading to the development of better products, services, and competitive pricing. This competitive environment not only benefits consumers but also challenges banks to innovate, improve their services, and operate more efficiently. The collaborative nature of open banking encourages an ecosystem where traditional banks and fintech startups co-create innovative open banking solutions. This synergy can accelerate the pace of digital transformation within the banking sector, leading to the development of cutting-edge technologies and platforms that address specific market gaps or consumer demands.  Challenges of open banking While open banking presents a plethora of opportunities, its adoption is not without challenges. Financial institutions must grapple with several hurdles to fully leverage the benefits open banking offers. One of the most significant challenges is fraud detection in banking and ensuring data security and privacy. The sharing of financial data through APIs necessitates robust cybersecurity measures to protect sensitive information from breaches and fraud. Banks and TPPs alike must invest in advanced security technologies and protocols to safeguard customer data. Additionally, regulatory compliance poses a considerable challenge. Open banking regulations vary widely across different jurisdictions, requiring banks to adapt their operations to comply with diverse legal frameworks. Staying abreast of evolving regulations and ensuring compliance can be resource-intensive and complex. Furthermore, customer trust and awareness are crucial to the success of open banking. Many consumers are hesitant to share their financial data due to privacy concerns. Educating customers on the benefits of open banking and the measures taken to ensure their data’s security is essential to overcoming this obstacle. Despite these challenges, the strategic implementation of open banking can unlock remarkable opportunities for innovation, efficiency, and service enhancement in the financial sector. Banks that can successfully navigate these hurdles and capitalize on the advantages of open banking are likely to emerge as leaders in the new era of financial services. Our open banking strategy Our newly introduced open banking solution, Cashflow Attributes, powered by Experian’s proprietary data from millions of U.S. consumers, offers unrivaled categorization and valuable consumer insights. The combination of credit and cashflow data empowers lenders with a deeper understanding of consumers. Furthermore, it harnesses our advanced capabilities to categorize 99% of transaction Demand Deposit Account (DDA) and credit card data, guaranteeing dependable inputs for robust risk assessment, targeted marketing and proactive fraud detection.  Watch open banking webinar Learn more about Cashflow Attributes

Published: April 25, 2024 by Laura Burrows

Growing deposits from existing customers and members is an ongoing priority for banks and credit unions. However, it can be challenging to identify the best candidates. Who among our customer base has significant deposit growth potential? Who among our member base has the financial capacity to take advantage of special offers? With an effective deposit growth strategy, you can find the best customers and members to engage.  What does an effective deposit growth strategy look like?  An effective bank and credit union deposit growth strategy is powered by differentiated data and digital engagement. Let’s take a closer look at each element:  Data: A comprehensive measurement of consumers’ income and insights into their banking behaviors can help you identify those with the greatest deposit growth potential. You can then use supplemental data, such as lifestyle and demographic data, to customize deposit offers based on your customers or members’ unique needs.  Digital engagement: To further personalize this experience, consider sending deposit offers through your mobile or online banking platforms when there are triggering events on their account. Not only does this optimize the digital experience, but it also helps boost the chances of your customers or members responding.  Finding the right partner  Experian’s solutions can help your business secure deposits and customer relationships in today’s crowded market, including Banking InsightsTM. Banking Insights provide greater visibility into integrated demand deposit account activity, such as checking and saving account inquiries, to help you better assess consumers’ financial stability. By using these insights to power your banking growth strategies, you can identify those with the financial capacity to bring in more deposits.  Read our e-book to learn about other solutions that can help you boost deposits, strengthen existing relationships, and provide seamless digital experiences. Read e-book

Published: November 9, 2023 by Theresa Nguyen

Many financial institutions have made inclusion a strategic priority to expand their reach and help more U.S. consumers access affordable financial services. To drive deeper understanding, Experian commissioned Forrester to do new research to identify key focal points for firms and how they are moving the needle. The study found that more than two-thirds of institutions had a strategy created and implemented while one-quarter reported they are already up and running with their inclusion plans.1 Tapping into the underserved The research examines the importance of engaging new audiences such as those that are new to credit, lower-income, thin file, unbanked and underbanked as well as small businesses. To tap into these areas, the study outlines the need to develop new products and services, adopt willingness to change policies and processes, and use more data to drive better decisions and reach.2 Expanded data for improved risk decisioning The research underlines the use of alternative data and emerging technologies to expand reach to new audiences and assist many who have been underserved. In fact, sixty-two percent of financial institutions surveyed reported they currently use or are planning to use expanded data to improve risk profiling and credit decisions, with focus on: Banking data Cash flow data Employment verification data Asset, investments, and wealth management data Alternative financial services data Telcom and utility data3 Join us to learn more at our free webinar “Reaching New Heights Together with Financial Inclusion” where detailed research and related tools will be shared featuring Forrester’s principal analyst on Tuesday, May 24 from 10 – 11 a.m. PT. Register here for more information. Find more financial inclusion resources at www.experian.com/inclusionforward. Register for webinar Visit us 1 Based on Forrester research 2 Ibid. 3 Ibid.

Published: May 12, 2022 by Guest Contributor

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