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7 differences

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Welcome to the
7 differences game

Discover the 7 differences between classic Credit Scoring and Open Banking Credit Scoring.

Click on the differences between the two visuals to reveal the benefits of Open Banking Credit Scoring.

Risk

Better risk management with Open Banking Credit Scoring

With Algoan’s solutions, access to the loan applicant’s financial data can improve detection of over-indebted profiles by 40% compared to biased or outdated data.

In the case of traditional credit scoring

Data submitted by the loan applicant when filling out the application is often incorrect. There is evidence that borrowers overestimate their living expenses, which is a risk when repaying the loan. In addition, the supporting documents requested are often susceptible to fraud and falsification.

In the case of credit bureau data, these have not been recently updated, which may jeopardise the risk calculation.

Know more about our data categorisation

Access to credit

More inclusive access to credit with Algoan

Open Banking Credit Scoring makes obtaining credit more inclusive, while limiting the risk of over-indebtedness for borrowers and financial risk for lenders. Pursuant to an iso risk analysis, more than 40% more candidates are accepted with Algoan’s solutions, with or without credit history.

Traditional credit scoring uses poor data

Based only on traditional data, so-called classic Credit Scoring limits access to credit to those who are able to repay. A single woman with two children who is renting may be ruled out, even if she manages her finances well. In countries with credit bureaus, someone with no credit history will also be denied a loan.

Time required for a decision

Instant response with Open Banking Credit Scoring

Calculation of the credit score by algorithm is completed in 300ms, thus allowing a decision to be made much faster than if they had to manually review the data provided by the loan applicant.

In the classical way without Open Banking:

Analysis of the information and supporting documents submitted by a loan applicant may take up to several days.

Cost

Lower costs with Open Banking Credit Scoring

The processing time is drastically reduced, (from several days to a few minutes) due to the fact that the procedure is 100% digital. The operational costs of processing a request are therefore greatly reduced. And in the end, the acquisition costs are reduced as well.

Score accuracy

The gini is a measure of the overall performance of the credit score, that is, it indicates the ability of the credit score to separate the good from the bad payers. The gini ranges from 0% (equivalent to flipping a coin to evaluate a loan applicant) to 100% (perfectly separating the good from the bad payers).

Algoan’s gini up to 80%!

At Algoan, Credit Scores have a gini of up to 80%, due to the accuracy of Open Banking data. The Algoan credit score also adapts to international data.

As opposed to 50% for traditional scores…

Traditional French credit scores show gini between 30% and 50%. In countries with credit bureaus, gini are between 50% and 70%.

Know more about Algoan Score

Customer journey

5min: that’s the time needed for the Algoan onboarding experience!

Under the Open Banking route, the loan applicant gives consent to allow access to his bank accounts. In a just a few seconds without providing any supporting documents, all the information needed for a credit decision is collected and categorised.

In contrary to the classical Credit Scoring journey

The process of applying for credit is long and tedious. The borrower is required to fill out a form where precise information about his personal situation is requested.
Many supporting documents are also required.

Know more about our onboarding experience

Data analysed

A fairer Credit Score with Algoan

An Open Banking Credit Score is based on the banking data shared by the loan applicant. An Open Banking Credit Score has the advantage of basing the decision on factual, comprehensive, and recent data. In particular, it allows us to detect vulnerability and possible financial stress points, while analysing the applicant’s behavior under similar situations. Socio-demographic data are not taken into account in the calculation of the score.

Judgment criterion for classical credit scoring

Traditional Credit Scoring is based on socio-demographic data (age, family situation, marital status, etc.) provided by the borrower, as well as non-payment data and predetermined credit scores for countries with credit bureaus.