Prism Data Partners with Plaid to Help Lenders Make Better Credit Decisions Using Open Finance Data

Cash flow underwriting and data analytics platform Prism Data announced it is partnering with Plaid, a data network powering the digital financial ecosystem, to make it faster and easier for businesses to analyze and use consumer-permissioned open banking data to underwrite consumers.

Plaid enables consumers to connect financial accounts at over 12,000 institutions globally to more than 8,000 apps. Prism Data, with tools like its market-leading CashScore™ and Insights products, helps financial providers make smarter credit decisions and drive better business outcomes by analyzing data from connected accounts. Today, we are introducing a new integration with Plaid’s Relay Token product that allows for a token access model between Prism, its lending customers, and Plaid. This allows Prism to deliver a more efficient cash flow underwriting experience for our clients by enabling us to simply and securely retrieve consumer-permissioned data.

Through Plaid’s Assets API, lenders can verify consumer-permissioned cash-flow data including detailed information about a borrower’s identity, assets, balances, and up to two years of transaction history, directly from their bank account. Many of Prism’s clients use this information to help determine whether an applicant’s cash flow is sufficient to qualify for a loan or credit product. Now, lenders can more easily integrate consumer financial information shared via Plaid into Prism Data, whose products provide rich and relevant analytics.

Businesses can save time and money by using Plaid to seamlessly share cash flow data directly with Prism Data, while sidestepping the costs of building bespoke systems for digesting, cleaning and securely delivering that data to Prism or other partners. Upon receiving the consumer-permissioned data from Plaid, Prism structures and analyzes it before delivering to clients the insights and scores they need to more deeply understand a consumer’s current financial position, key trends, and risk profile.

“We’re making it simple for lenders to make better credit decisions, faster, using Prism and Plaid,” said Erin Allard, Prism Data’s General Manager. “With Plaid, lenders can focus on the big-picture questions about how open banking data can drive their businesses, and leave the data retrieval and analysis to trusted partners like Plaid and Prism.”

Open finance enables better lending and decision making by taking into account consumer-permissioned data that provides a more holistic picture. “The use of more current and comprehensive data can provide lenders with a more holistic view of their borrowers’ finances and improve underwriting outcomes,” said Tamara Romanaek, Head of Partnerships at Plaid. “With our partnership with Prism, not only are we able to help lenders simplify real-time consumer permissioned data retrieval, we’re also able to help those lenders access powerful analytics and actionable insights for underwriting. We’re thrilled to empower lenders with more robust access to cash flow data to improve borrower results.”

Prism’s products give lenders an analytical edge by more fully illuminating a consumer’s financial position and risk profile. Prism’s Insights are built upon categorized bank account transactions that are distilled into thousands of trended attributes, including details on income stability and timing, balance trajectories, savings rates, rental payments, use of emerging forms of borrowing like Buy Now, Pay Later (BNPL) loans and much more. This information is vital to understanding a consumer’s current financial condition and ability to repay, but is missing from traditional credit reports. Prism’s CashScore credit scoring model leverages a subset of these Insights to give lenders a proven, compliant, explainable, and automated way to estimate risk of repayment and first- party fraud.

“This is a first-of-its-kind partnership, and a key milestone in building out the next generation of credit scores and risk analytics, powered by open banking,” said Jason Rosen, CEO of Prism Data. “I expect this will significantly speed the adoption of consumer cash flow underwriting, allowing lenders to apply open banking-based insights to their businesses more easily than ever before. I’m excited to work with Plaid to help our mutual clients serve more customers, build better products, and make smarter decisions.”