A new study from Juniper Research expects credit scoring services to grow by 67% to $44 billion by 2028. Alternative Credit Scoring Data to Supercharge Financial Inclusion
The report anticipates that emerging markets will experience the greatest growth; projecting the African & Middle Eastern region to grow by 117% over the forecast period, achieving a spend of $3.7 billion in 2028. Driving this growth will be the inclusion of alternative data into underwriting models. Using input from sources such as social media activity and monthly utility bills enables lenders to expand into unbanked and underbanked populations throughout emerging markets; opening up new customer segments and boosting financial inclusion.
The report urges the use of Open Banking within alternative credit scoring; enabling credit bureaus and other providers to access bank account transaction information. This helps enrich credit data, creating a holistic view of the consumer; determining a more accurate credit score. The report also urges the use of Open Banking within business credit scoring, as this technology can improve critical lending and access to finance for SMEs.
Research author Cara Malone remarked: “Open Banking can address numerous challenges, especially relating to cashflow and debt management. At present, the use of Open Banking in business credit scoring is lagging. It creates greater ease and transparency of sharing financial data; elevating business credit scoring, unlocking greater access to lending.”
Alternative credit data and embedded scoring models are efficient means of boosting access to finance, and when combined with Open Banking and AI, they will grant access to new customer segments. This will enable providers to help alleviate issues with thin files, where limited information is held on individuals and businesses, in both developing and developed markets; enabling more accurate and predictive credit scoring.
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Find out more about the new report: Global Credit Scoring Market 2023-2028, or download a free sample.
Banking 4.0 – „how was the experience for you”
„So many people are coming here to Bucharest, people that I see and interact on linkedin and now I get the change to meet them in person. It was like being to the Football World Cup but this was the World Cup on linkedin in payments and open banking.”
Many more interesting quotes in the video below:
