Equifax Australia and Mastercard collaborate on 'Open Score', a venture aimed at enhancing financial accessibility
Equifax Australia and Mastercard have announced a new strategic partnership, marking the launch of Equifax Open Score - a bank transaction-based credit scoring solution designed to promote financial inclusion.
The first product in this collaboration, Equifax Open Score, assesses a consumer's financial health in real-time, providing a score between 0-10. It utilizes secure consumer-consented bank transaction data obtained through the Consumer Data Right (CDR) to offer a more comprehensive view of a consumer's financial behaviour.
Melanie Cochrane, CEO of Equifax A/NZ, stated, "Equifax Open Score will empower more Australians to manage their financial health, particularly those with limited credit access." The score includes key contributing factors to help consumers understand what influences their score and offers transaction alerts to help identify unusual or fraudulent transactions.
Brenton Charnley, vice president of Open Banking, Australasia at Mastercard, added, "Open Score aims to improve financial literacy, budget management, and informed borrowing decisions." The collaboration also aims to deliver new financial inclusion products to the Australian market.
Equifax Open Score is built on the principle of real-time data sharing and is powered by Mastercard's accredited Open Banking platform, ensuring secure sharing of banking data. Consumers have full control over their data, and sharing only happens with their explicit permission.
The score includes a Confidence Metric to indicate the reliability of the score representing a consumer's financial wellbeing. By incorporating alternative data such as bank transactions, Equifax Open Score can score consumers who may lack established credit histories, thereby increasing the number of scorable applicants and helping bring millions of consumers into the credit system.
Combining Equifax Open Score with traditional credit data improves overall credit risk predictability. For example, related Equifax products using alternative data achieve significant lifts (10% KS lift or higher) in scoring accuracy and up to 40% boosts in approval rates without increasing bad loan rates.
The product aims to empower banks, credit unions, fintechs, and alternative lenders to make faster, more accurate credit decisions, reduce credit and fraud risk, expand access to credit, and develop new product opportunities.
Equifax Open Score benefits from a partnership between Equifax and Prism Data, leveraging Prism’s CashScore, a sophisticated cash flow underwriting score derived from transaction data. This score is predictive across credit tiers, from subprime to super-prime.
Overall, Equifax Open Score combines open banking and transaction data analytics to promote financial inclusion by offering a reliable credit risk assessment for consumers traditionally underserved or invisible in credit systems. This innovative approach helps lenders unlock new segments and foster financial well-being while maintaining sound credit risk management.
- Equifax Open Score, the initial product of the strategic partnership between Equifax Australia and Mastercard, utilizes data from the Consumer Data Right (CDR) and Mastercard's accredited Open Banking platform to provide a real-time assessment of a consumer's financial health.
- The score, ranging from 0-10, offers a comprehensive view of a consumer's financial behavior, including key contributing factors and transaction alerts to help identify unusual or fraudulent transactions.
- The collaboration aims to deliver new financial inclusion products to the Australian market, with a particular focus on consumers with limited credit access, by incorporating alternative data such as bank transactions.
- By incorporating Prism Data's CashScore, a sophisticated cash flow underwriting score derived from transaction data, Equifax Open Score can score consumers who may lack established credit histories, thereby increasing the number of scorable applicants.
- Combining Equifax Open Score with traditional credit data improves overall credit risk predictability, resulting in significant lifts (10% KS lift or higher) in scoring accuracy and up to 40% boosts in approval rates without increasing bad loan rates.
- overall, Equifax Open Score leverages open banking and transaction data analytics to promote financial inclusion, offering a reliable credit risk assessment for consumers traditionally underserved or invisible in credit systems, while helping lenders unlock new segments and fostering financial well-being through sound credit risk management.
