Experian and Plaid Team up to Unlock Smarter Credit Decisions With Real-Time Cashflow Insights

Experian analytics and Plaid permissioned data help lenders assess risk more accurately, expand access to credit and deliver better outcomes for consumers

COSTA MESA, Calif. & SAN FRANCISCO--(BUSINESS WIRE)--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. 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.¹ 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.

For more information about Experian’s open banking capabilities, please visit: https://www.experian.com/business/solutions/data-solutions/open-banking-solutions.

About Experian

Experian is a global data and technology company, powering opportunities for people and businesses around the world. We help to redefine lending practices, uncover and prevent fraud, simplify healthcare, deliver digital marketing solutions, and gain deeper insights into the automotive market, all using our unique combination of data, analytics and software. We also assist millions of people to realise their financial goals and help them to save time and money.

We operate across a range of markets, from financial services to healthcare, automotive, agrifinance, insurance, and many more industry segments.

We invest in talented people and new advanced technologies to unlock the power of data and to innovate. A FTSE 100 Index company listed on the London Stock Exchange (EXPN), we have a team of 23,300 people across 32 countries. Our corporate headquarters are in Dublin, Ireland. Learn more at experianplc.com.

About Plaid

Plaid is a global data network that powers the tools millions of people rely on to live healthier financial lives. Our ambition is to facilitate a more inclusive, competitive, and mutually beneficial financial system by using data analytics to simplify payments, revolutionize lending, and lead the fight against fraud. Plaid works with thousands of companies, including fintechs, Fortune 500 companies, and many of the largest banks to empower people with more choice and control over how they manage their money. Headquartered in San Francisco, Plaid’s network spans over 12,000 institutions across the U.S., Canada, U.K., and Europe.

¹ Based on Experian analysis when Cashflow Score is compared to conventional credit scores, tailored to targeted risk tiers. Predictability is based on the Kolmogorov-Smirnov test.