FDATA Member Spotlight: TransUnion
TransUnion has been in the business of enabling trust for more than 50 years. What began as a credit reporting agency has evolved into a global information and insights company, leveraging decades of data stewardship and analytics to build a robust understanding of consumer identity. Today, TransUnion helps consumers and organizations transact with confidence and achieve great things.
As a pioneer in alternative and trended credit data, TransUnion provides a more complete view of consumer financial health. By complementing traditional credit information with broader data sources, we enable more accurate assessments of creditworthiness, advancing financial inclusion and supporting economic growth.
We talked Senior Director, Global Alternative Data Ben Glock about the move toward open banking in the United States and Canada, the value of alternative data to consumers, and innovation in lending.
FDATA: How does the use of alternative data expand options for consumers and strengthen our financial system?
TransUnion: Access to credit is access to opportunity, yet many consumers remain underserved because traditional credit models do not fully capture the complexity of their financial lives. Alternative data, such as consumer-permissioned financial account information, can reveal patterns in cash flow that lenders may use to expand access to credit and deliver better products and services to more consumers.
A recent TransUnion survey of 2,000 U.S. consumers highlighted a financial picture that is both dynamic and resilient. While nearly half experienced a significant financial or employment event in the past year, 68% report relatively consistent monthly income and more than a third often or always have money left after regular monthly expenses. These indicators of financial capacity can provide important context alongside traditional credit information, helping surface strengths that might otherwise go unseen.
For these consumers and many others, alternative data can help bridge important information gaps. By incorporating cash flow insights such as income patterns and checking account activity, organizations can gain a more complete and current understanding of a consumer’s financial capacity. This richer view enables organizations to responsibly expand credit access to consumers who may be overlooked by traditional models alone and offer terms that better reflect their current financial situation.
FDATA: Consumers are increasingly sharing their financial data with third parties for a wide variety of products and services. How do you think about those benefits in the lending space?
TransUnion: In lending, consumer-permissioned financial data can create meaningful benefits for both consumers and lenders. Consumers are increasingly looking for faster loan application experiences, more personalized product offers, and better approval odds and terms. One of the most important advantages of cash flow data is its ability to provide a clearer view of income and ability to pay, helping to achieve those outcomes.
Today’s consumers earn income from a wide variety of sources beyond traditional payroll employment. In fact, only 47% of consumers report receiving regular salary or wages. Many receive income from multiple sources, including self-employment, gig work, contract work, commissions, pensions, investments, and part-time employment.
For many lenders, traditional approaches to gathering payroll data or verifying self-reported income could leave gaps for a growing number of consumers. The insights that can be derived directly from financial account information, through methods such as consumer-permissioned data sharing, are important to help lenders, landlords, and financial service providers offer the right products and services to the right consumers.
When supported by strong privacy protections, security standards, and clear consumer consent, income and cash flow data can help create a financial system that is more accurate and more inclusive, giving consumers greater access to opportunity while maintaining trust in how their information is used.
FDATA: We’ve seen policymakers express concern that adding alternative data to consumer reports may unfairly harm consumers’ credit scores. How are you addressing this concern?
TransUnion: We believe alternative data should help expand opportunity while maintaining strong consumer protections. As new data sources become more widely available, it’s important that consumers understand how their information is being used and have appropriate rights, transparency, and privacy protections, which is a major focus of TransUnion’s policy efforts.
Our research shows many consumers feel traditional credit scores do not fully reflect their financial circumstances. 42% of surveyed consumers said their credit score doesn’t fully reflect their current financial situation, and 59% believe adding cash flow data could help. When used responsibly, alternative data can help lenders better understand financial capacity and expand access to credit, particularly for consumers with limited credit histories.
That said, financial inclusion isn’t simply about maximizing credit regardless of circumstance; it’s about helping consumers access credit they can responsibly manage. Alternative data can provide important insight on both financial opportunity and financial risk. And if that information contributes to an adverse action, consumers will receive clear explanations and appropriate rights to understand and dispute the information used in the decision.
That is why TransUnion carefully evaluates the impact of new data sources before incorporating them into credit scores. For example, this cautious approach has guided our integration of Point-of-Sale and Buy Now, Pay Later (BNPL) data, where we do not currently include this information in our scoring models but stand ready to do so as more data furnishers report to us.
FDATA: What excites TransUnion most about the future of cash flow data and innovation in lending?
TransUnion: Credit data provides an established view of borrowing and repayment behavior. Cash flow and alternative data signals go beyond the credit score to add current, directional context about how consumers earn, hold and manage money. Together, these complementary insights can help financial institutions better understand financial capacity to strengthen credit strategies, marketing and customer experience.
We’re particularly encouraged by the growing evidence that cash flow data can provide meaningful predictive value across a range of lending decisions. While the benefits are especially significant for consumers with limited or no traditional credit history, early analytics indicate that cash flow insights can improve risk assessment and decisioning across the broader credit spectrum, including consumers with established credit profiles.
AI and agentic technologies create an even bigger opportunity to make alternative data more useful and accessible. Interoperable standards such as FDX, secure access methods such as APIs, and expanded data sets can help turn complex financial information into timely insights that support better consumer outcomes. While authorized agentic data access will require further industry standards and policy development, it creates an exciting opportunity for consumers to put their financial information to work in new ways.
For consumers to realize the benefits of cash flow and alternative data alongside AI in credit use cases, it’s important that the industry apply the right approach across fair lending, consent, privacy, and interpretability. That will require connecting frontier technologies with established regulatory and governance frameworks, alongside thoughtful evolution in policies and rules that preserves consumer protections while enabling innovation that improves access, inclusion, and consumer outcomes.
