Experian and Plaid Partner on Cash Flow Data for Lenders

Experian and Plaid have partnered to provide proven risk insights and real-time cash flow data to banks, credit unions and consumer lenders.

These resources include, in a single solution, credit analytics from Experian, a global data and technology company, and permissioned data from Plaid, a financial data network, the companies said in a Thursday (June 5) press release emailed to PYMNTS.

With the addition of cash flow insights to traditional credit data, lenders gain a broader view of consumers’ finances and can assess risk more efficiently and holistically, especially for consumers with limited credit history, according to the release.

For consumers who consent to share cash flow data from their bank account when applying for a loan, this offering can enable greater access to more affordable credit, the release said.

“This is just the beginning of what we believe will be a very powerful relationship with Plaid,” Scott Brown, group president financial services for Experian North America, said in the release. “Together, we’re helping to accelerate the adoption of cash flow insights to drive faster decisions, stronger portfolios and new financial opportunities for consumers.”

Plaid’s Consumer Report, which is used in this service, includes cash flow data from more than 12,000 financial institutions, per the release.

“Our work with Experian is about removing long-standing barriers, making it easier for lenders to access consumer-permissioned data and make better decisions,” Plaid Chief Operating Officer Eric Sager said in the release. “Together, we’re building a more inclusive, intelligent and competitive financial system.”

Thirty-one percent of U.S. consumers, or about 80 million individuals, lack reliable access to credit, according to the PYMNTS Intelligence and Sezzle collaboration, “How Credit Insecurity is Changing U.S. Consumers’ Borrowing Habits.”

The report found that these “credit insecure” consumers are either “credit marginalized,” meaning they were rejected at least once when applying for credit products in the previous year, or “credit avoidant,” meaning they do not use credit products and are not interested in applying for any.

When Experian launched its Cashflow Score, which is designed to give lenders a clearer view of applicants’ financial behavior, Brown said solutions that include cash flow insights can “enhance decisions and ultimately bring more consumers — including those who are traditionally underserved — into the financial ecosystem.”

When Plaid announced in April that it raised $575 million in new funding, Plaid Co-Founder and CEO Zach Perrett said, “Whether it’s signing up new users, fighting fraud, enabling bank payments or making underwriting decisions, our network is core to the way that our customers run their businesses and consumers run their financial lives.”