This list of alternative data sources is not exhaustive. Regardless of which data sources most appropriately align with your business model, the objective is to ingest the right alternative data to build the right credit profile by individual or business and lend based on an adjusted credit risk score without sacrificing speed or financial risk. Here are a few companies finding success with some of the alternative data mentioned above: • Australian-based fintech Jacaranda Finance focuses on short- term lending and uses bank statement data for its alternative scoring system. By working with a financial services insights’ solutions company, Credfin, Jacaranda analyzes and categorizes comprehensive bank statement data to clean, extract and group data for a loan underwriter’s review. Jacaranda found using this alternative data type enabled them to identify customers likely to repay their loans and accurately predict those likely to default. 6 • U.S. fintech Petal is a credit card company offering products for consumers new to credit and typically overlooked by the big banks. Petal analyzes a consumer’s banking history and then creates an alternative credit score called Cash Score, which measures creditworthiness based on one’s income, savings and spending history. 7 • Singapore fintech Credolab works with lenders globally and has found that when working with its clients in Africa, the best source for alternative scoring comes from mobile wallet data as very few consumers utilize either debit or credit cards. This alternative data also serves as a substitute for income, helping to compute predictive value for credit risk decisions. 8 • China’s online-only bank WeBank has a successful unsecured personal loan product. Through a relationship with the internet company, Tencent, WeBank uses their social media data, including WeChat messaging app data, within its strategy and to determine fraud risks. Data analyses are also created to assign in-house social scores to help make loan decisions. 9
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