Plaid Teams With Prism to Help Lenders Make Better Credit Decisions

Open banking platform Plaid has launched a partnership with cash flow underwriting service Prism Data.

The collaboration is designed to help businesses analyze and use consumer-permissioned open banking data to underwrite consumers faster and easier, according to a Thursday (May 18) press release.

“We’re making it simple for lenders to make better credit decisions, faster, using Prism and Plaid,” said Prism Data General Manager Erin Allard in the release. “With Plaid, lenders can focus on the big-picture questions about how open banking data can drive their businesses and leave the data retrieval and analysis to trusted partners like Plaid and Prism.”

Plaid’s Assets API lets lenders verify cash flow data, such as information about a borrower’s identity, assets, balances and up to two years of transaction history from their bank account, per the release.

“Many of Prism’s clients use this information to help determine whether an applicant’s cash flow is sufficient to qualify for a loan or credit product,” the release said. “Now, lenders can more easily integrate consumer financial information shared via Plaid into Prism Data, whose products provide rich and relevant analytics.”

The news comes at a time when consumers have been turning to credit cards to navigate the inflation-fueled economy.

However, for consumers who have been tapping credit cards to cover a broad and significant portion of everyday expenses — the “high spenders” as a PYMNTS report put it earlier this month — there is increasing pressure to uncover alternative ways to pay for the goods and services they need.

“Credit Card Use During Economic Turbulence,” a PYMNTS and Elan Credit Card collaboration, found a third of all cardholders said they increased their share of credit card spending over the last six months, a sign of how much individuals and households have been relying on their cards.

“Only 15% reduced spending,” PYMNTS wrote. “Higher costs, not surprisingly, have been a prime mover in spurring that pivot toward using cards more often.”

Prism’s partnership with Plaid follows last week’s announcement that the company was spun off from its parent, Petal and both companies will split $35 million in new funding.