“The proliferation of data from mobile payments can provide credit underwriters with transaction information generating credit insights.” In this McKinsey report, the authors highlight some of the new ways in which lending institutions can rely on alternative sources of data to build financial profiles for the unbanked.
At First Access, we believe there is tremendous consumer and commercial value in these data. We work with clients to help separate the wheat from the chaff, identifying, as this report notes, “which data are meaningful, what level of detail is optimal, and what combinations of data are most effective.”
We understand that the standards upon which financial institutions assess credit worthiness ought to be reexamined, allowing financial identities for the unbanked to be built on more than just non-debt instruments, like mobile data, remittance payments and utility payment schedules.
In so doing, financial institutions will grow better at identifying fraud, lowering the cost of lending, broadening the suite of financial service offering and expanding deeper into the pool of the world’s unbanked population.