Offline lending still consists of a lot of paper work and duplication of basic form filling. one of the keys to shortening the cycle times here is to be able to verify that what a potential borrower says he owns, he actually owns. Credit bureau Experian, along with financial technology firm, Finicity, just launched a service that can significantly improve how quickly borrowers can get a loan.
This week’s guest is Laura DeSoto, svp of transactional products at Experian Consumer Information Services, who discussed how the credit scoring business has evolved and how AI is making previously invisible “unscoreables” feel more included.
Edited highlights below.
How has your business changed over your tenure at Experian?
Technology has really been a game changer in the information services business and certainly, here, at Experian. I remember 20 years ago that we were using mainframes and our time to market was often six to 12 months. We were hampered compared to today, where we have big data architectures, artificial intelligence and cloud technologies. We’re able to speed up innovation and most importantly, improve the accuracy and experience users have when interacting with Experian.
Digitizing the credit bureau speeds lending up
We know that consumers expect that purchasing decisions can happen with the speed of a click of the mouse. We’re able to harness technology and innovation now to create an end-to-end digital experience for consumers in the lending product. Our announcement this week was that we’re the first credit bureau to introduce technology that allows consumers to direct much of the lending transaction from their laptop or mobile device. The crux of the technology is that it allows for real time asset and income verification from 80 percent of all financial accounts. This will allow lenders to speed up and digitize the lending process, impacting millions of borrowers.
The role asset and income verification play in the loan process has changed
My boss recently moved from Northern California to Southern California and was looking to get a mortgage. He went into a household name bank. He had three loan officers sitting across from him. They asked him a series of questions over 45 minutes, taking notes to understand where he held his financial assets. When they finished, they asked him to then prove that everything he said was true. Another 45 minutes. So, he pulls out pay slips and documents and then was asked to fax or send to them via pdf. The loan officer then needed to scan or re-key that information into his system — another 45 minutes. At that point, the institution was ready to start the loan process. This is technology that’s not from this century. This is an area ripe for disruption.
Experian partnered with Finicity on this product
Finicity has been a fintech leader in account aggregation for the past 15 years. So this is a core technology and competency gained over many years. Finicity has integrations into over 16,000 financial institutions. That core technology, capability, and proven expertise in being able to safely and securely integrate into financial institutions was paramount and why our partnership with Finicity is so critical to this program.
Is your new product the beginning or end of the digitization process?
We’re beginning to use technology to digitize the credit bureau — technologies like AI to remove inaccuracies in data. We’re plugging into the API economy and to speed up decisioning and product identification. We’re also using new technologies to enhance access to more affordable credit. We recently integrated the Cloudera enterprise platform with our analytical sandbox environment to help facilitate common issues to make it quicker for clients to access our information. Our new verification of income and asset reports are really the latest products to enable more fast, accurate decisioning. It’s part of a larger strategy to modernize the credit bureau.