Experian partners with Finicity to improve lending

Credit bureau Experian has teamed up with technology firm Finicity.
Credit bureau Experian has teamed up with technology firm Finicity.

Credit bureau Experian has teamed up with technology firm Finicity to introduce a new product aimed at speeding up the consumer lending process in the US, making it more digital.

By using Finicity's technology, which aggregates data on accounts from thousands of banks and financial institutions, Experian's new service will give lenders real-time access to information on a customer's assets, income and ability to pay, the companies said.

This means consumers will be able to apply for mortgages without having to provide reams of paper-based verification documents during the underwriting process, the companies said. Instead, they will only need to authorise lenders to view their account data, they noted.

The new service, set to launch today, could reduce the underwriting process from as many as 70 days to about 10 days.

The launch reflects the growing pressure faced by banks and other brick-and-mortar lenders to offer better digital services to their customers. Banks have been facing more competition from a new cohort of online lenders, which are able to offer loans online in days or minutes by automating much of the process.

Some banks have responded by either partnering with digital lenders or launching their own online lending services. JPMorgan Chase & Co said in February it was gradually introducing a digital mortgage platform, where customers can apply online and track applications by mobile phone, while Goldman Sachs launched online consumer lending platform Marcus last year.

Experian and Finicity said their product will also help consumers with little or no credit history by enabling lenders to access alternative data that can be used to demonstrate whether they would be able to repay a loan. This includes information such as their rent payments and utility and phone bills.

It comes as the Consumer Financial Protection Bureau conducts an inquiry into ways to expand access to credit for consumers with little or no credit history through the use of alternative data. The regulator is seeking public feedback on the benefits and risks of using such alternative data sources.

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