Experian and Plaid team to provide real-time cashflow insights to lenders
Today, Experian, a global data and technology company, and Plaid, a leading financial data network, announced a strategic collaboration to lower barriers to accessing cashflow solutions and expanding financial inclusion.
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Now, banks, credit unions and consumer lenders can leverage Experian and Plaid's combined expertise in real-time cashflow data and credit analytics to accelerate decisions, sharpen risk assessments and improve borrower outcomes.
'We are highly focused on making real-time cashflow data and insights more accessible to drive greater financial inclusion and enable our clients to have a more holistic view of an individual's financial health,' said Scott Brown, Group President Financial Services for Experian North America. 'This is just the beginning of what we believe will be a very powerful relationship with Plaid. Together, we're helping to accelerate the adoption of cashflow insights to drive faster decisions, stronger portfolios, and new financial opportunities for consumers. We're achieving this while delivering an experience that is transparent and provides consumers with control every step of the way.'
How it works: turning real-time cashflow data into actionable insights
As part of the newly forged relationship, lenders can leverage Plaid's secure connectivity capabilities used by 1 in 2 U.S. bank account holders, and Experian's expertise in advanced credit analytics and decisioning from a single solution.
'Real-time cashflow insights, alongside traditional credit data, are becoming essential for lenders to improve business outcomes and expand access to credit,' said Eric Sager, Chief Operating Officer at Plaid. 'Our work with Experian is about removing long-standing barriers, making it easier for lenders to access consumer-permissioned data and make better decisions. Together, we're building a more inclusive, intelligent and competitive financial system.'
When a consumer consents to share cashflow data from their bank account during a loan application, a Consumer Report is generated on their behalf by Plaid's consumer reporting agency — and then securely delivered to Experian via a seamless integration. Experian analyzes the data and returns a predictive Cashflow Score or set of Cashflow Attributes to the lender in near real time.
Consumer Report provides up to two years of historical data and the latest cashflow data from more than 12,000 financial institutions. Backed by the largest open banking data network — powering 7,000 apps and services — Plaid enriches and analyzes over 500 million transactions daily with proprietary machine learning and AI-powered categorization specifically for lending.
Experian's Cashflow Score provides up to a 25% lift in predictive performance when compared to scores using conventional credit data. The score ranges from 300 to 850 and can be used to make decisions across credit cards, personal loans, auto loans and more.
Why it matters: driving inclusion with a modern approach
When traditional credit data is paired with cashflow insights, it creates new opportunities to assess risk more efficiently and holistically, particularly for consumers with limited credit histories. Incorporating cashflow insights gives lenders a broader view of consumers' finances, which can improve risk management and help expand access to more affordable credit. Ultimately, the collaboration between Experian and Plaid provides lenders with the capabilities and insights needed to offer first- and second-chance credit opportunities to even more consumers.
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