Former Experian Exec on Modernising Credit Lending

Fintech startups are developing innovative ways to make the credit lending process more inclusive and help people without credit histories access credit

Photo of two people looking at credit scores on the phone

Ask my kids about me, and they’ll tell you I’m a big quote guy! One of my all-time favourites comes from John F Kennedy. It was in 1963, just a few months before his untimely death, when Kennedy told a crowd:

Change is the law of life. And those who look only to the past or present are certain to miss the future.”

Nearly six decades later, the message in those few sparse lines is still remarkably profound and relevant. In fact, such is the ever-increasing pace of change across modern life that it might be more salient now than ever before. That’s probably one of the reasons I find myself constantly revisiting it.

However, there are some other reasons why I like it so much. You see, through much of my career, I’ve been a person who has believed in change and who has been willing to fight for it.

More specifically, I’ve been a person who’s looked to update and overhaul long-standing, inefficient processes, which remain in place long after their sell-by date has expired.

A system for yesterday’s world

That journey has now led to me tackling the credit-lending process, which looks and operates the same as it did when Kennedy was still alive. From the outside looking in, many people consider these systems to be ‘advanced’ and at the cutting edge of technology, but instead, they’re truly antiquated.

While these systems have remained in a state of stasis over that period, the world around us has changed beyond recognition. Therein lies one of the critical problems undermining the existing credit lending process. Most systems are built for times in which we no longer live. This is leading to significant challenges, which need to be addressed.

Discarded and disregarded

Even in countries with advanced credit lending systems, such as the United States and much of Europe, many people cannot generate creditworthiness without first building up an adequate credit history. This is problematic, especially for immigrants, who very rarely have credit histories in the countries they’re migrating to.

That doesn’t mean these people don’t have sizeable assets or a successful track record building and operating businesses in a previous country. However, none of this is ever considered. Instead, these individuals are disregarded by the system and considered high credit risks, unable to access lending capital even when they deserve to.

A new dawn for lenders

Fortunately, if you look at the consumer lending space, there have been products launched that do consider more comprehensive data sources, known as alternative data points. Over the last few years, several solutions have been introduced to this market designed with the express purpose of helping users to build their respective credit scores.

Now, we’re finally beginning to see something similar in the B2B lending market, thanks to fintech companies like Uplinq. For small-to-medium-sized businesses (SMBs), the company’s solution could be a real game-changer. Thankfully, it may soon help more of them to fulfil their ambitions when looking to scale operations.

The modern choice

At their core, numerous new fintech systems are building for the demands of the modern day and one that runs off the currency of our time; data. Such innovative platforms use billions of unique data points to validate the creditworthiness of businesses, which in turn, helps to unlock new lending capital from lenders.

For example, Uplinq recently conducted a benchmark pilot test against Experian, who had developed a proprietary custom risk model for a mid-sized non-bank lender in the US. The results were impressive. Using only Experian’s data, Uplinq performed 2.5x better than Experian. Using all data available, Uplinq performed 8x better than Experian.

Growing global appeal

Better still, it won’t only be SMBs in Western nations that benefit from the system and its more liberal use of alternative data. In fact, I think the international market will be a considerable driver. In nations with less formalized financial systems, the company’s solution offers an immediate upgrade to what currently exists.

Of course, there will be challenges along the way. Regulation remains a massive cross to bear, but with the correct protocols in place, fintech companies have the potential to navigate this path nimbly, bringing about new products and solutions that accentuate the world of SMB credit lending and that ultimately benefit us all.

About the Author: Mike Dean has proven himself to be a visionary leader with a track record of implementing winning strategies in the consumer services field. During this time, Mike has held senior roles at Experian, SoFi and CarPay. Within these roles, Mike has played an integral part in helping to drive strategy and sales while simultaneously creating award-winning marketing campaigns and products and developing work cultures that are both dynamic and positive. As such, his career has seen him manage across both a domestic and international scope, leading teams of up to 1,200 employees at a time.