Yodlee Widens Its Lending Services with Credit Risk Data Product

Open padlock on a gateA few weeks ago Yodlee partnered with Vanguard to practice wealth management. Now the firm’s palette is expanding yet again, to leverage its data to help FIs provide loans to the underbanked.

Today, Yodlee is releasing Risk Insight, a way to automate the logistical toils of evaluating potential borrowers’ credit. The tool lets lenders inject user-endorsed financial data into existing credit bureau and custom models, and will enhance credit evaluation process, reduce fraud and improve pull-through and approval ratios, according to Yodlee, which was launched in the late 1990s.

Terry McKeown, Yodlee’s practice manager for credit risk, said Yodlee has had customers in the lending area for quite some time, like the small business loan firm Kabbage, and that this gives Yodlee a robust data set.

Traditionally, borrowers of all demographics cannot qualify for loans because of insufficient credit representation, McKeown said. These thin-file, no-file or generally underbanked customers will benefit from Risk Insight, McKeown said:

We’re grabbing and providing data financial institutions need to make a solid credit decision. The demographics of borrowers are really across the board. One value of using alternate data is for loan servicing [of] those with very little data. This allows FIs to actually expand their demographic by using data to provide a more holistic view of the consumer or small business’ financial situation.

What’s more, Yodlee isn’t stopping at lending. John Bird, Yodlee’s VP of product marketing, added that Yodlee has much in store for the rest of the year. Across the entirety of the fintech spectrum, from lending, investments ownership, to small business and retail banking, there’s no shortage of parties interested in finding a way to leverage data, he said:

Large FIs feel threatened by some types of alternative fintech loan services … because of that they are starting to recognize the value of world-class data aggregation platforms … [so] when it comes under threat from disruptors that’ve built their platform from the ground up, FIs take notice … Large FIs see Yodlee and know we are working with retail, small businesses, small lending and many other sectors to help them keep up with data aggregation. FIs want to be able to partner with a firm that can actually neutralize that threat.

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