Alternative lending

The fintech credit card provider is pitching to banks the same software it uses to determine borrowers' creditworthiness. But whether banks are ready for technology that emphasizes cash-flow analysis over traditional credit scoring is open to debate.

Lenders need to use alternative data as an overlay to traditional underwriting methods to help creditworthy customers in hardship because of the coronavirus crisis.

Congress should pass legislation authorizing use of nontraditional data sources to make credit more available to consumers who’ve taken a hit from the coronavirus pandemic.

The U.S. government will shortly funnel trillions of dollars into the economy to soften the coronavirus’ impact on a variety of industries and small businesses. Payment companies that are also lenders will soon find out if it’s enough to save the market.

Attempts to rewrite the method for determining unintended discrimination in housing should not bleed into fair-lending laws.

When established card networks such as Visa, American Express and Mastercard start investing in fintech lending platforms such as Divido and ChargeAfter — as well as in the fintech lenders themselves such as Klarna and Vyze — it’s a clear signal that the future of unsecured personal loans may not be delivered by banks.

Kaustav Das was part of Kabbage’s effort to transform small-business lending by using new data analytics, and the CEO of Petal wants him to help it do the same in consumer credit cards.

Want to level the playing field with big banks and fintechs in the year ahead? Here's where to start.

Regulators are beginning to recognize the importance of using alternative data to provide credit for the underbanked. Now is the time to expand its use across the industry.

Financial regulators’ statement cautiously encouraging lenders to go beyond traditional underwriting in their lending decisions is a big step forward for the use of alternative data and artificial intelligence, bankers say.