Moving beyond alternative data — cash flow underwriting becomes industry standard

Plaid has introduced a new hosted Link solution that allows lenders to access real-time cash flow data more easily during the underwriting process. With cash flow underwriting becoming an industry standard, this solution aims to make it as simple as possible for lenders to access real-time cash flow data through Plaid. The use of alternative data in credit decisioning processes is on the rise, with many leading digital-first financial services companies using Plaid to help consumers share their assets and income information more easily. Consumers are increasingly comfortable sharing bank statements, rent/utility payment history, and savings and investment account information for better lending decisions. Rising interest rates and inflation have made deeper consumer visibility more important than ever, with 83% of traditional lenders open to using cash flow data like bank account balance and transaction history to modernize loan offerings. Plaid's new hosted Link experience can be helpful for both digital and online presence management, allowing support agents to help customers with verification during live chat. The company is also working with industry organizations to help lenders make use of alternative data, such as partnering with Credit Builders Alliance (CBA) on a pilot program to provide consumers with better credit options.