Analytics software provider FICO (NYSE: FICO) announced a partnership with Plaid, a financial data network, in order to enable the so-called next generation of the cash flow UltraFICO Score. This solution will combine the FICO Score, used by US lenders, with real time cash-flow data from Plaid to provide lenders with a credit score that delivers consumer risk assessment “without operational complexity.”
Building on FICO’s work in cash flow scoring with the release of the UltraFICO Score, this collaboration with Plaid—whose infrastructure enables consumer-permissioned data from various FIs—will offer lenders with a seamless integration, helping transform banking insights into credit decisions.
This solution will be distributed via Plaid’s Consumer Reporting Agency, Plaid Check.
Julie May, vice president and general manager of B2B Scores at FICO said that by bringing together FICO’s credit score intelligence with Plaid’s cash flow data, they’re creating the foundation for better lending decisions.
The UltraFICO Score solution will leverage cash flow data – historical and current information about “the money flowing into and out of a consumer’s transaction accounts (e.g., checking, savings, and money market) – accessed through Plaid’s open finance network of consumer-permissioned data.”
Fintech Plaid says it now powers almost 1 million financial connections every day and “has helped more than half of Americans with a bank account securely move more of their financial life online.”
The new score will offer lenders various advantages in addition “to enhanced credit risk performance: alignment to the FICO Score to enable confident cash flow adoption without introducing lengthy testing or added risk; streamlined implementation for lenders, minimizing operational complexity and accelerating onboarding; and universal compatibility.”
As noted in the update, FICO enables decisions that help individuals as well as businesses around the world thrive.
Established back in 1956, the company is a support of the use of predictive analytics and data science to “improve operational decisions.”
Using FICO solutions, businesses in more than 80 countries “do everything from protecting 4 billion payment cards from fraud, to improving financial inclusion, to increasing supply chain resiliency.”
The FICO Score, used by 90% of top U.S. lenders, is the “standard measure of consumer credit risk in the US and has been made available in over 40 other countries.”
As mentioned in the announcement, Plaid is a data network that serves as the analytics layer for financial services.
Plaid’s data analytics solutions aim to provide improved onboarding, credit decisioning, payments, and anti-fraud.
Plaid works with various companies, such as fintechs, Fortune 500 companies, and some of the largest banks to enable consumers with “more choice and control over how they manage their money.”
With head offices based in San Francisco, Plaid’s network spans more than 12,000 institutions across the US, Canada, UK, Europe.