Latvian fintech company Nordigen is leveraging financial data to help banks and lenders improve the speed and accuracy of their credit decisions. Here’s how they’re using open banking – and Tink’s platform – to disrupt credit bureaus across Europe and help approve more creditworthy applicants.
Traditional credit checks usually rely on outdated financial records and other old tools.
Data analytics provider Nordigen wants to change this and help lenders make more accurate assessments based on real-time financial data.
To make it possible, Nordigen is using Tink’s account aggregation to access transaction data straight from consumers’ accounts – which they then analyse to generate insights.
Traditional credit checks usually rely on outdated financial records and the same old tools that credit bureaus have been using for decades. This makes the process slow, costly, and not fully reliable, because the results don’t necessarily reflect a customer's current financial picture. Then there’s the fact that banks across the world reject the majority of loan applications they receive.
Data analytics provider Nordigen wanted to change this. And they’re doing that by offering credit scoring insight tools that help lenders make more accurate assessments – all thanks to access to financial data.
Nordigen’s solution analyses consumers’ bank account data to identify risk-critical patterns and spending behaviours. These insights then help lenders make more accurate credit decisions and approve more creditworthy applicants.
By basing credit decisions on real-time data, lenders can more accurately calculate the probability of someone defaulting on a loan, optimise the overall approval and default rates, and reduce operating costs.
Having a more holistic picture of a customer’s financial situation leads to fairer offer for consumers – and less risk for lenders.
To make their solution possible, Nordigen needed reliable bank connectivity to access the financial data. So they turned to Tink’s account aggregation. Tink provides the raw, real-time transaction data straight from consumers’ accounts – which Nordigen then analyses to recognise spending patterns and generate insights.
‘People are becoming increasingly invisible to traditional credit bureaus in Europe. Financial service providers are constantly testing alternative sources for credit risk data to better understand their customers’ creditworthiness. By partnering with Tink, we’re able to offer an end-to-end solution and enable more companies to leverage open banking data across Europe,’ says Nordigen CEO Rolands Mesters.
Nordigen is just one of the companies that’s using new open banking capabilities to change financial services for the better – and bring benefits to businesses and consumers alike.
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