Urjanet Uses Utility Data to Expand Access to Credit

© Can Stock Photo / icemanj

Urjanet is using utility data to help underwrite loans and widen access to financial services — and it has more utility data than anyone else.

The company started in the energy and sustainability space in 2010. (“Urja” means energy.) It now has an increased focus on data analysis tools and digital transformation and has close ties with the National Science Foundation and Georgia Tech. These two organizations will use big data and analytics to manage energy management provided by the Atlanta-based Urjanet.

Urjanet’s background is in utility data aggregation for commercial enterprises managing their energy and reporting on their sustainability efforts. So how did it find itself involved in financial services?

Matt Kuo, vice president of product management at Urjanet, said that the move into financial services came when Malik sand team realized the potential in not only helping companies manage energy use, but in sharing the energy use data across industries, to be the utility data provider to the world.

Kuo, himself a Georgia Tech graduate, joined Urjanet from the alternative lender Kabbage, where his mission was around leveling the playing field for small businesses. Before that he worked for several large technology companies. His parents emigrated to the U.S., had difficulty gaining credit as “thin-file” or “no-file” borrowers, and leveraged all their savings to get credit, Kuo said.

Urjanet has several customers in the financial services space, Kuo said. The platform has been available for two years, and this fall launched a new credit risk and ID verification solution, at Money2020 in Las Vegas.

“It was an interesting path to entering financial services,” Kuo told Bank Innovation. “At the time we were doing this research, alternative lenders were just coming onto the scene and there was a lot of talk and interest around alternative credit data. Consumer privacy was another hot topic, and the GDPR privacy regulations. The perfect fit was utility data and we were able to launch a proof of concept.”

Urjanet offers on-demand, user-permissioned utility data to customers needing more data to offer their products or services. “Many lenders are looking at alternative data sets to see if there are patterns between past payment data and future payments,” Kuo said. “And they find that this data is very predictive of future behavior.”

Experian noted recently that 20% of thin-file customers could be scored using utility data, and that 77% of potential borrowers reported a score increase when reporting utility data. The 30 million underbanked consumers in the U.S. are perfectly positioned to add utility data in a user-permissioned model, Kuo said.

“We’re starting to see good adoption around utility data,” he said, with the main use case being retargeting declined applicants. “We’re seeing interest at all levels,” he said. Alternative lenders move more quickly, but traditional banks also find this useful.”

Underwriting is not the only use case for Urjanet. Some customers use it to manage risk over time, Kuo said, noting that utility bills are typically the most critical bills consumers pay, and the last bill they stop paying. Stopping paying your light bill, in other words, is a good predicter of looming defaults, Kuo noted.

Urjanet gathers data from over 5,000 providers in 40 countries. Kuo noted this is extremely difficult to get at scale. The National Consumer Telecom & Utilities Exchange, which is managed by Equifax, only has about 85 providers, and customers must opt-in to share data.

Pricing is on a per-request basis, with discounts for volume commitments.

The company offers out-of-the-box user-interface toolkits, a management dashboard, so that new customers of  Urjanet can submit a request within hours of signing. “We offer a robust set of APIs,” Kuo said. Part of what makes this data so valuable is for this reason —  “Not many utility companies provide APIs,” Kuo said.