We’re extremely excited to publish Ocrolus’ 2020 Fintech Lending Market Map.
At Ocrolus, we have been helping lenders automate their underwriting and improve the quality of their credit decisions for nearly five years, and we have gained tremendous insight along the way. We are publishing this map to share our perspective on the lending market and the evolution of the dynamic technology that powers it.
Lenders are increasingly defined by the technology and data they use. Relatively new players like PayPal, Square, LoanDepot, Affirm, Amazon and Intuit, to name a few, have come to dominate the market with their unique acquisition channels and proprietary underwriting data.
Access to banking data has helped level the playing field; new technology has made it easy to retrieve high-resolution transactional data that can be leveraged by nearly any incumbent or new entrant in origination. Pioneered by leading fintech lenders, cash-flow analysis is going mainstream as the most accurate measure of financial health.
Sure enough, in the footsteps of data aggregation leaders like Plaid and Finicity, even newer consumer-permissioned APIs are popping up for other data sources like utilities (Urjanet), credit cards (Fidel), employment (Pinwheel) and accounting (Codat).
At Ocrolus, we believe that there should be a unified lens for viewing the disparate data sources that lenders evaluate. Whether loan application data comes in the form of bank statements or permissioned data streams, lenders should apply the same cash flow metrics and risk models, and use interoperable tools for consistent decision making.
For the wealth of new credit model inputs that lenders have at their disposal, data structuring is more challenging and more important than ever. Lenders who optimize their data pipelines will improve their bottom line with better-performing debt. They also benefit at the top of the funnel with smoother borrower experiences, giving applicants the optionality of how to provide data and the convenience of faster access to credit.
We believe that lending will continue to become less siloed and more modular and that fintech infrastructure will help blur the lines between fintech lenders, banks and technology companies. Though the map includes conventional lenders, we have named it the Fintech Map because of the narrowing distinctions between traditional originators and fintechs.
Of course, no diagram is capable of doing full justice to the lending industry, and we publish it with equal parts wisdom and humility. If you have any suggestions or questions that you would like to share, please email email@example.com.