![]() ![]() By utilizing APIs, lending businesses could improve their product offering instead of spending significant time and resources on rebuilding whole systems. Tune into our latest State of Identity Podcast with MX on Modern Connectivity and Open Finance.ĪPIs can help banks significantly improve inter-system connectivity by linking disparate systems within a bank’s network, easing processes such as applications for mortgages, consumer loans, and deposit accounts. ![]() Companies like Plaid and MX have changed back-end infrastructure by improving the interactions among the network through application programming interfaces (API). Much of the improvement to financial infrastructure has been driven by improved communications between systems and databases. This transformation has been driven by new entrant fintech players that have challenged large established institutions by changing the way consumers and entities interact with financial services such as payments, lending, insurance, personal finance, money transfers, and consumer banking. With 1.7 billion people underbanked worldwide, alternative data could make loans more accessible and create financial inclusion for a broader community.įinancial institutions have gone through a transformation over the past few years driven by technology innovation. Companies were merging traditional and alternative data sets to get more holistic views of potential customers, which allowed many consumers to qualify for loans that they otherwise would not be able to get with a traditional credit scoring method. ![]() Alternative data refers to any information about a company or a consumer that is not captured by traditional data sources or credit scoring methodologies. Companies first began to use alternative data for their lending decisions. Initially, transformation in the lending industry began with peer-to-peer loans in conjunction with the 2008 financial crisis. The rise of fintech companies and solutions has drastically changed how lending works for both consumers and entities. ![]()
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May 2023
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