- Experian launched the Cashflow Data Bureau, a new FCRA-regulated consumer reporting agency that uses consumer-permissioned cash flow data to support lending decisions.
- The new bureau will serve as the foundation for Experian’s broader cash flow ecosystem, combining bank account data with existing tools such as Cashflow Attributes and Cashflow Score.
- The launch puts Experian into closer competition with Plaid and other cash flow underwriting providers as lenders increasingly use banking activity alongside traditional credit data to assess borrowers.
Data analytics and consumer credit reporting company Experian is launching a new consumer reporting agency (CRA) called the Experian Cashflow Data Bureau. The new CRA’s goal is to help banks leverage consumer-permissioned cash flow insights to support underwriting decisions.
The Experian Cashflow Data Bureau, which operates under the Fair Credit Reporting Act (FCRA), aims to help the nearly one-in-five consumers that lack access to credit or have damaged credit. Experian found that 60% of consumers who have either been denied credit or received less-than-favorable terms believe that the outcome of their application would have been different if the lender would have used cashflow underwriting, taking into account the borrower’s recent income and banking activity along with their credit history.
With the new Cashflow Data Bureau, Experian is creating an FCRA-regulated foundation for its broader cash flow decisioning ecosystem. The new platform leverages consumer-permissioned bank account data aggregation and report generation to help financial institutions bring cashflow insights into their existing decision-making process.
“We’ve spent decades building the trusted data, analytics, technology, and expertise financial institutions depend on every day,” said Experian North America CEO Jeff Softley. “With Experian Cashflow Data Bureau, we’re applying that experience to cash flow and making it easier for our clients to adopt these insights with confidence and at scale. By helping lenders understand a more complete picture of consumers’ financial lives, we can power more-informed decisions and ultimately help more consumers access the financial products and services they need, when they need them.”
The new Cashflow Data Bureau will serve as the foundation for Experian’s broader cash flow ecosystem, bringing together existing cash flow products such as Cashflow Attributes and Cashflow Score with capabilities for consumer consent, data aggregation, standardized reporting, analytics, and decisioning. The launch essentially brings cash flow data into a bureau-like framework, allowing lenders to incorporate consumer-permissioned banking activity into underwriting alongside traditional credit bureau data.
Cashflow underwriting is becoming increasingly popular in the lending sphere as it can help lenders better understand applicants’ day-to-day finances instead of just offering a snapshot in time. Experian’s analysis shows that the insights can help lenders increase approvals by up to 25% without adjusting their risk tolerance.
Today’s launch puts Experian into closer competition with open banking providers such as Plaid, which has expanded beyond account connectivity into FCRA-compliant consumer reports, cash flow analytics, and underwriting scores through its Plaid Check subsidiary. Interestingly, Experian also partners with Plaid to access consumer-permissioned cash flow data, making the two companies both partners and competitors in the space. Other competitors include Prism Data, Mastercard (Finicity), and Nova Credit.
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