Plaid, a prominent open banking enabler, is now working with neobank MoneyLion to streamline the loan-making process.
In a blog post, Alain Meier, Head of Identity at Plaid, said that for decades, lenders have relied on credit reports, but the lack of real-time information failed to provide a complete picture of the potential borrower. With a new service entitled Plaid Layer, they are now able to remove friction with this instant financial onboarding platform.
MoneyLion is the first Fintech to leverage the new Plaid platform. MoneyLion currently partners with over 1,200 firms to pair consumers with financial solutions based on bespoke needs. MoneyLion will now be able to integrate real-time cash flow data for a loan application that may be approved in just a couple of clicks.
“Lenders like Integra Credit will benefit from accessing cash flow insights in MoneyLion’s hosted decisioning platform and through their existing pre-qualification integrations. By using Consumer Report, lenders can expand their reach to underserved borrowers, including those with thin credit files or no credit history who have been historically overlooked by traditional credit reports.”
Plaid shares that since the launch of Layer, early lenders have seen conversion rates increase an average of 17.5%. That is a big increase.
Plaid says they are addressing a top need of their customers by considering cash flow underwriting.
“This first-of-its-kind experience enables you to offer a seamless loan application experience while getting the data and insights you need to make informed decisions. If you’re a lender considering cash flow underwriting but worried about adding more friction, this is the solution for you.”