Data, Lending 2 min read
Taktile’s Plaid integration empowers lenders to unlock new growth opportunities
Open banking data has been a game-changer for the lending industry, empowering lenders to build next-generation credit products that serve more customers than ever before.
This transformative data source significantly increases lenders’ data coverage, providing valuable insights into their customers' financial well-being. Lenders can develop highly precise underwriting signals, which unlock opportunities to reach new customer segments and explore growth areas.
When paired with modern risk decisioning technology, which enables lenders to rapidly build and refine underwriting decisions, the potential for bringing innovative credit products to market becomes limitless.
This powerful combination of cutting-edge decisioning technology and open banking data is why Taktile decided to partner with Plaid. Taktile’s Plaid integration provides lenders with a comprehensive solution to harness open banking data across the entire lifecycle of the underwriting process.
Plaid, a global open banking provider and data network, has been leading the charge of global open banking adoption since day one. It has helped thousands of fintechs innovate beyond traditional credit scoring techniques and build market-leading credit underwriting strategies.
At the same time, Taktile, the next-generation decision engine provider, is helping fintechs worldwide achieve unprecedented growth by enabling credit and risk teams to rapidly build, run, and optimize automated underwriting decisions without the help of technical engineers.
Importantly, Taktile equips fintechs with the ability to seamlessly integrate data into their underwriting process and create powerful signals for assessing customer risk – from connecting to internal customer databases to enriching heuristics through Taktile's Marketplace of market-leading data providers like Plaid.
“This partnership isn’t just about transforming the underwriting process —it's about helping lenders really unlock the power of cash flow data,” explains Maik Taro Wehmeyer, CEO and Co-Founder of Taktile. “By leveraging Plaid’s data insights through Taktile’s decision engine, lenders can build highly personalized credit solutions and get them to market at record speed.”
1. Unlock new lending opportunities and grow customer approvals
According to a recent Plaid survey, 63% of consumers feel that their credit score fails to provide lenders with a comprehensive understanding of their financial capabilities to repay a loan.
This implies that traditional credit scoring methods likely impact lending decisions for a significant portion of the consumer population – especially for applicants with limited or absent credit histories, such as immigrants, freelancers, and younger demographics.
By elevating risk assessment capabilities through cash flow data, lenders can not only grow customer approvals but also tap into unexplored customer segments to grow their customer base.
Consider a medical professional who has just moved to the United States. They are probably a great candidate for any lender’s loan portfolio, but because they have no credit history in the US, many lenders would reject them because they cannot accurately assess their risk.
Using Plaid data, lenders can create a 360-degree view of customer risk profiles through detailed information about a borrower’s identity, assets, balances, and up to two years of transaction history directly from their bank account.
2. Speed up time-to-market with a one-click integration
Building automated underwriting decisions that include connections to crucial data sources is often a painful and resource-intensive process, requiring implementation by technical engineers over several months.
A recent Taktile survey revealed that the vast majority of lenders (75%) still need to enable their credit teams to self-serve when it comes to adding and experimenting with new data sources in their automated decisions.
Plaid and Taktile offer lenders an all-in-one solution. By connecting to Plaid through Taktile’s Decision Engine, lenders can access consumer cash flow data with the click of a button. Then, they can rapidly build powerful automated underwriting decisions through pre-built low-code “nodes”.
As a result, fintechs can significantly expedite the product launch process. Timelines are reduced from months to weeks, saving valuable time and resources.
3. Create powerful KPIs that quickly uncover your optimal underwriting strategy
Getting a connection to open banking data is merely the first step. The true competitive edge for lenders comes from the ability to build powerful signals from the data and undertake rapid policy optimization.
Discovering the right signals for your product, segment, and risk appetite when using cash flow data can be tricky. That is why Plaid equips lenders with both raw data and pre-established 'signals' or key performance indicators (KPIs) about customer financial behavior – to help them more quickly find their optimal strategy.
From an infrastructure perspective, speed wins. Taktile found that lenders who experiment with and implement policy changes the fastest tend to be the closest to achieving their performance goals.
Leveraging Taktile’s experimentation capabilities, credit and risk experts are empowered to quickly and easily refine their policies through shadow, A/B, and back-testing, enabling them to reach their optimal underwriting strategy faster.
“Whether it's faster approval times, more competitive interest rates, or customized repayment options, we want to help lenders deliver exceptional customer experiences that foster loyalty and trust and drive long-term profitability,” says Maik.
Furthermore, using Taktile, lenders can more effectively manage customer acquisition costs by designing segmented credit decision flows that follow a “waterfall” approach. This ensures they only incur data costs for the right parts of their customer segment at the right stage of the credit decision process.
By streamlining the development and implementation process, Plaid and Taktile empower lenders to capitalize on new opportunities quickly, ensuring they can stay ahead of the curve by offering innovative credit products and services that meet the evolving needs of consumers.
