Market uncertainty and increased costs continue “to challenge small businesses, and many will rely on extended credit lines and loans to weather the current environment and grow their businesses,” according to an update from Mastercard (NYSE: MA).
Mastercard is announcing that it has “added advanced analytics to its Open Banking platform delivered by its subsidiary, Finicity in the U.S.”
These analytics can “help lenders manage their risk profiles while also adding diverse and inclusive credit models for small business loans as well as ongoing monitoring and expansion of credit card lines.”
Jess Turner, Mastercard’s Executive Vice President for Global Open Banking and API, said:
“Small businesses are increasingly looking for greater choice in how they borrow, pay and manage their finances. Open Banking provides lenders the owner-permissioned data and advanced analytics they need to offer more choice in financial services to small businesses, which are the backbone of the American economy.”
According to Mastercard’s Rise of Open Banking Small Business Report, 85% of small business owners are “looking for more choices that deliver faster and easier access to capital.”
And, according to the Federal Reserve bank’s Small Business Credit Survey, the share of small business applicants “receiving all the traditional funding they sought fell from 51% in 2019 to 36% in 2020 to 30% in 2021.”
Innovating with our partners
Now, more than ever, “having a digital presence is critical.”
Mastercard has helped small businesses “open their digital doors, as well as relying on Mastercard for support to pay and get paid with confidence for decades.”
As noted in the update:
“When small business owners give permission to access their financial data via open banking, lenders can leverage our Mastercard APIs to apply rich cash flow, balance and payment history analytics to transactions, extracting valuable insights such as small business’ liquidity, revenue, balance, cash flow, and risk of loan repayment default.”
Silvana Hernandez, Executive Vice President, Product and Engineering, North America, Mastercard, said:
“Responsible lending is the key to growth for many small-and medium-sized businesses. Mastercard open banking provides permissioned access to data that fuels new and improved financial experiences for small businesses.”
Partnering with fintech innovators, 1-800Accountant, Amount, Codat, Enigma, GenEQTY, Lendio, Nav, Rho, and upSWOT, Mastercard open banking helps “expand choices in financial experiences in lending & credit decisioning, secure account opening, account-based payments and business financial management.”
For more details on this update, check here.