Unlock Financial Inclusion with Alternative Credit Data

A significant portion of the population remains outside the traditional credit system due to limited or non-existent credit histories. This includes young adults, recent immigrants, and individuals who prefer cash transactions. Without sufficient credit data, these individuals often face challenges in accessing financial products and services. Alternative credit data is something that can increase inclusion.

Alternative credit data encompasses non-traditional information such as rental payments, utility bills, mobile phone usage, and subscription services. By analysing these data points, financial institutions can gain a more comprehensive view of an individual’s financial behaviour, enabling more accurate credit assessments.   

• Expanded Customer Base: Reach underserved populations who lack traditional credit histories. 
• Improved Risk Assessment: Gain deeper insights into applicants’ financial behaviours, leading to more informed lending decisions. 
• Enhanced Financial Inclusion: Support broader access to credit, promoting economic growth and stability. 

Integrating alternative data requires a strategic approach: 

• Data Integration: Utilise platforms capable of aggregating and analysing diverse data sources. 
• Model Development: Develop credit scoring models that incorporate alternative data points. 
• Staff Training: Educate teams on interpreting and leveraging alternative data effectively. 

When using alternative data, it’s crucial to adhere to data protection regulations and ethical standards: 

• Consent Management: Ensure individuals provide informed consent for data usage. 
• Data Privacy: Implement robust measures to protect sensitive information. 
• Transparency: Maintain clear communication with applicants regarding data usage and decision-making processes.