Credit Accelerator Harnesses Alternative Data to Enable More Inclusive Credit Decisions

BERWYN, Pa., Oct. 20, 2023 /PRNewswire/ -- Envestnet | Yodlee is proud to unveil Credit Accelerator, a lending data solution that promotes financial inclusion by harnessing alternative data to expand access to credit for individuals who may have limited or no traditional credit history.

The launch of this solution comes on the heels of the Consumer Financial Protection Bureau's newly proposed rule implementing Section 1033 of the Dodd-Frank Act which creates a consumer-centric open banking framework in the United States. This new framework provides opportunities for businesses and consumers to realize new opportunities in credit and lending. As highlighted in the CFPB 1033 NPRM, when consumers are able to share their personal financial data, they can share details about their income and expenses that may give lenders more confidence when extending credit.

The macro-economic instability brought about by recent global crises has made reliance on traditional credit scores a riskier proposition than ever before. An overwhelming majority of lenders now recognize that conventional credit data and scores often fail to provide a comprehensive assessment of a consumer's creditworthiness. In response, 59% of lenders have turned to alternative data in their underwriting processes, recognizing the need for a more holistic approach to assessing credit risk.

Envestnet | Yodlee's Credit Accelerator empowers lenders to serve a wider range of consumers by leveraging a comprehensive set of alternative data sources, including cash flow, income deposits and asset information. This innovative solution draws from a global network of 17,000 data sources, providing up-to-date financial data and up to 24 months of statement data for various financial accounts, such as checking, savings, investments, credit cards, and loans. This additional insight into a borrower's financial behaviors and decision-making gives lenders a more complete and accurate view of an applicant's responsibility and willingness to meet their financial obligations.

In today's dynamic financial landscape, consumers often undergo significant life events that may not be immediately reflected in their traditional credit data. This underscores the importance of leveraging multiple data assets to assess creditworthiness accurately, ensuring a deeper understanding of an individual's financial profile.

"Delivering financial inclusion hinges on the utilization of alternative lending data, as nearly 50 million Americans are credit invisible and cannot obtain mortgages, credit cards or other lending products," said Farouk Ferchichi, President at Envestnet | Yodlee. "Many of these individuals consistently pay rent, utilities and other recurring financial obligations, demonstrating financial responsibility and reliability. With an open banking framework in place, Envestnet's Credit Accelerator can help bridge this gap and empower everyone to live an Intelligent Financial Life™ by providing a more accurate and comprehensive assessment of creditworthiness."

A robust tool that enhances traditional credit assessment for lenders, Credit Accelerator provides transaction-level data on assets, investments, and balances, enhanced by data science-driven transaction descriptions. By leveraging Envestnet | Yodlee's award-winning Transaction Data Enrichment, enriched transaction attributes provide a clearer view of a consumer's overall financial picture.

Attendees at this year's Money 20/20 conference in Las Vegas, NV from October 22 – 25 can learn more about Credit Accelerator by visiting the Envestnet | Yodlee Booth in Money Hall, #14327.

In addition, Lisa Novier, Head of Governance, Risk & Compliance for Envestnet | Yodlee will share insights on open banking and the CFPB's proposed 1033 rule during a live recording at the conference, The MoneyPot: Move Over Europe, North America's the New Open Banking Champ!

Envestnet | Yodlee, with its industry-leading footprint, offers digital solutions, open banking connectivity, data analytics and differentiated experiences to its customers, delivered and embedded through APIs and standalone portals. Its solutions empower customers – including financial institutions in banking; technology wealth management and financial advisors; small and medium-sized businesses; and their end consumers – to intelligently connect, grow, protect, and manage the financial wellness of their business all in one place. The introduction of Credit Accelerator reinforces the company's commitment to transforming the lending landscape.

About Envestnet
Envestnet is transforming the way financial advice is delivered through an ecosystem of technology, solutions and intelligence. By establishing the connections between people's daily financial decisions and long-term financial goals, Envestnet empowers them to make better sense of their finances and live an Intelligent Financial Life™. With more than $5.4T in platform assets – more than 107,000 advisors, 16 of the 20 largest U.S. banks, 47 of the 50 largest wealth management and brokerage firms, more than 500 of the largest RIAs, and thousands of companies, depend on Envestnet technology and services to help drive better outcomes for their businesses and for their clients.

Envestnet refers to the family of operating subsidiaries of the public holding company, Envestnet, Inc. (NYSE: ENV). For more information, please visit www.envestnet.com, and follow us on LinkedIn and X (@ENVintel). 

Envestnet | Yodlee does not offer any loan products or make any lending decisions. 

SOURCE Yodlee Inc.