On Wednesday, February 26th, we joined Kreditz for a breakfast seminar on Next Generation Credit Scoring.
The breakfast brought together real industry pioneers to showcase and discuss how open banking data is transforming their business. Here the 7 key insights:
Data is Everything:
• The sheer volume and quality of real data powers AI and modern credit scoring technologies. Kreditz has analyzed over 12 billion transactions, demonstrating that detailed account information is the foundation for advanced credit models.
Ongoing Evolution:
• We’re moving from traditional credit bureau systems into the PSD2/open banking data era. Next up is the open finance era, potentially aided by initiatives like FIDA around 2027, with a fully open data ecosystem expected in the next 10 years.
Superior Account Data:
• Current account data provides significantly better and more up-to-date insights than traditional sources. Kreditz has shown that using open banking data can decrease default rates from 3.9% to 1.9%.
Adaptation in Banks:
• Banks, especially in the Baltics, have quickly embraced modern credit scoring. In Helsinki, roughly half of the lenders in attendance are already leveraging these technologies.
Customer Benefits:
• Open banking data not only boosts lenders’ accuracy but also benefits customers with faster service, better rates, and a smoother experience. Younger generations are particularly open to sharing account data with trusted lenders.
Enhanced Fraud Prevention & AML:
• Improved data quality from open banking helps in fraud prevention and AML, as open banking data is secure and far less susceptible to manipulation than traditional bank statements.
Reevaluating the Positive Credit Register:
• The traditional positive credit register hasn’t been the game-changer many hoped for. It often brings higher costs and lower approval rates, effectively acting as a negative register that hinders rather than helps.
A huge thank you to all speakers and participants for making today’s session so insightful. Let’s continue the conversation and drive innovation together!
