Fintech
The new Experian tool promotes financial inclusion
New Hesperian Tool today announced the launch of Cashflow Attributes™, an innovative solution to help expand fair and affordable access to credit, especially for invisible and thin-document consumers. With over 900 income, cash flow and convenience attributes, Experian cash flow insights are now available, enabling lenders to seamlessly integrate banking data into their decision-making processes*.
The consumer’s credit report is the most effective means of assessing lending risk; However, nearly 106 million U.S. consumers are unable to secure credit at traditional rates because they are credit invisible, cannot be assessed by conventional credit scores, or have a subprime or lower credit score.[1] Overlaying traditional credit report data with cash flow information helps create a more detailed view of a consumer’s financial health and creditworthiness for lenders and can provide greater opportunities for consumers.
Because it is important:
- Financial inclusion: 42% of adults do not have a conventional credit score in a range that typically warrants access to credit at standard rates[2]. Cashflow Attributes, which leverages checking and savings account information, offers a more complete view of an individual’s financial profile. Using traditional credit data with cash flow information obtained from the lender can unlock opportunities for consumers who may not have qualified if a lender had solely used traditional credit data.
- Increased predictive accuracy: While cash flow information** is inherently predictive, when viewed with traditional credit information from Experian and expanded Fair Credit Reporting Act data, cash flow attributes can increase predictive accuracy up to 20%[3] – enable lenders to drive revenue growth while mitigating risk.
- Consumer Willingness: Research from Experian shows that 71% of consumers are willing to share their banking information if it increases their chances of credit approval.[4]
“Supporting financial inclusion and creating an equitable path to credit is ingrained in our DNA,” said Scott Brown, president of Experian Financial and Marketing Services Group. “We believe that banking information has untapped potential and that our new cash flow attributes represent an exciting step forward that can be easily integrated into lending decisions. Looking ahead, we will continue to leverage our leading credit data, new data elements and analytical expertise to unlock new opportunities for both consumers and businesses.”
How cash flow attributes work:
Lenders requesting cash flow attributes provide Experian with non-personalized transaction information from their existing customers or information about consumer-authorized accounts from other banks.
Next, Experian, as a service provider to its lender customers, analyzes and categorizes the information using its proprietary categorization model.
And within seconds, Experian returns transaction categories and predictive attributes to the lender.
Experian’s proprietary categorization model can also be leveraged independently by lenders to gain deeper insights, drive more personalized experiences and help improve financial management tools.