Consumers Are Ready to Share Their Cashflow Data. Are U.S. Banks Listening?
By Ashley Knight, SVP Product for Experian Financial Services and Marketing
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Executive Summary
- Banking consumers are receptive to sharing their personal financial data, including cashflow, in exchange for better, more personalized products and services.
- Financial institutions in other countries are moving rapidly to respond, embracing open banking to extend customer relationships. But U.S. banks lag, hampered by everything from stodgy technology to weak analytical capabilities.
- Yet consumer-permissioned cashflow insights, including direct deposits and reoccurring payments can help lenders create a more complete picture of a consumer’s creditworthiness, leading to improved performance versus conventional credit data.
A recent survey found 70% of American consumers would be willing to share their banking information for better loan rates, financial tools, or personalized spending insights.
For U.S. banks, this statistic isn’t just a signal; it’s a siren.
The global open banking market is projected to surge from $29.6 billion in 2025 to more than $300 billion by 2035. Over the next five years, the use of consumer-permissioned cashflow data will evolve from a differentiator to an expectation.
Yet, while financial services in markets like the UK, EU, Australia and Canada are taking swift advantage of open banking (or are, in some cases, mandated to do so), some U.S. banks are barely off the starting blocks — often slowed by a lack of analytical expertise, the inability to capture consumer consent, infrastructure gaps, and more.
The question U.S. banks must now face isn’t whether to act, but how. It’s time for U.S. financial institutions to listen to consumers and make the move to begin leveraging these insights with purpose, transparency, and trust at the core.
Consumers Are More Open Than Ever
Today’s consumers understand the power of their data in all facets of modern life, and they want to use it to their advantage. They’ve grown comfortable sharing personal financial information in exchange for completing everyday tasks more easily, including filing taxes, budgeting, and making digital payments.
It’s no surprise that younger consumers who’ve grown up in the digital-first era are more comfortable with this notion. When broken down by generation, 80% of Millennials and 75% of Gen Zers said they would share their banking data if doing so could improve their likelihood of getting approved for credit, compared to 60% of Baby Boomers.
This openness among younger consumers presents a powerful opportunity for financial institutions, which can use consumer-permissioned cashflow data to help build out this demographic’s thinner credit files to serve them more fairly and effectively.
However, financial institutions must keep in mind that transparency is key. Consumers are far more likely to grant access to their financial data when they understand exactly what they are giving, how it will be used, and what they will receive in return. Consumers are willing to share, but they, rightfully, want to stay in the driver’s seat.
The Business Case For Action
Beyond meeting evolving customer expectations, banks have several compelling reasons to act swiftly on this consumer shift.
First, consumer-permissioned cashflow insights, including things like direct deposits, reoccurring payments, and balances, help lenders create a more complete picture of a consumer’s creditworthiness. Ultimately this translates to better affordability checks, smarter risk modeling, and reduced defaults, with up to a 25% increase in predictive performance when compared to scores using conventional credit data.
These insights also enable lenders to identify underserved consumers including those who are new to the country and younger consumers who are often overlooked when conventional scoring methods are used as a standalone. By leveraging cashflow insights, lenders gain a more wholistic view of a consumer’s financial situation to enable first and second chance credit opportunities and provide credit where credit is due for more consumers. In fact, leveraging these insights can help lenders experience up to a 30% increase in approvals without adjusting their risk tolerance.
Beyond financial inclusion, cashflow insights can help banks gain a deeper understanding of their existing customers to identify cross sell or upsell opportunities while building deeper relationships and customer loyalty.
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How U.S. Banks Can More Forward
Despite clear demand and compelling benefits, many institutions still lack the systems needed to securely capture consumer consent, ingest and interpret transaction data at scale, and translate that information into meaningful insights that can be used to make real-time decisions.
Making sense of this data requires a new set of analytical expertise to provide meaningful context and insight, such as categorizing transactions, identifying income patterns, flagging anomalies, and correlating behavioral trends with credit risk.
For example, given the uniqueness of transaction information as a consumer permissioned data set, lenders who are not already working with it find difficulty testing, modeling and getting started. Internally, we refer to this as the “cold start” problem. Lenders need historical transaction data tied to credit performance histories to build and test cashflow underwriting models to understand model performance prior to going into production.
And, as always, technology is only as effective as the trust that supports it. To maintain compliance as well as the consumer trust that underpins data sharing, security must remain paramount. That includes the use of secure APIs for the safe, authorized exchange of financial data along with clear and transparent processes for capturing consumer consent.
Thankfully, today’s U.S. banks don’t need a full overhaul to take advantage of this moment. New off-the-shelf solutions are enabling banks to seamlessly integrate consumer-permissioned cashflow data into their credit decisioning workflows, using it to enhance rather than replace traditional credit models.
Clear Signals Require Decisive Response
The era of consumer-permissioned data is here. Consumers are ready, willing, and increasingly expectant that their financial data will be used to deliver better and more personalized financial experiences.
U.S. banks that hesitate at the starting line may soon find themselves outpaced not only by global peers and digital-first competitors but also by the very customers they aim to serve.
Those that recognize this shift, and respond with thoughtful, transparent, and secure strategies, will gain a competitive advantage and play an important role in increasing financial access for more consumers.
