What the Equifax and FICO Partnership Means for the Future of Finance

by Martin Kurpiel, Senior Vice President of Technology Solutions & IT

June 12, 2019

Credit giants Equifax and FICO have joined forces in a move that has both companies getting into the alternative data market.

The two companies announced in late March they would be pooling their collective consumer financial data sets to offer the Data Decisions Cloud, a data and analytics tool that can help banks make smarter lending decisions. According to the announcement from the two companies, the product allows users access to data collected from non-traditional sources, like whether an applicant has been able to meet other financial obligations.

While it’s unclear exactly how much combined data the two companies have within their cloud product, it’s safe to say that the market and demand for alternative data sources is unlikely to shrink. Reports also indicate that traditional credit score competitors TransUnion and Experian have made plays of their own to get into the alternative data game. But what does more data being available to banks actually mean for the consumer, and what should we expect in the future as this trend continues?

It remains to be seen what banks and other lending institutions will ultimately do with access to alternative sources of data, but it is clear that the appetite for this data isn’t going anywhere. While consumers are rightly skeptical of giving up more data to banking institutions, by improving service and credit availability to customers, banks can create a new lending environment where everyone wins.

The article can also be read by visiting PaymentsJournal.