Prism Data Introduces CashScore v4

Prism Data, a leading cash flow underwriting infrastructure and analytics platform, today announced the launch of CashScore® v4, a new and more powerful version of its market-leading cash flow underwriting score that helps financial institutions and fintechs more accurately assess creditworthiness for virtually any applicant or borrower using deposit account and open banking data.

Prism's CashScore enables lenders to make better credit decisions through cash flow underwriting, distilling intensive data structuring, sophisticated feature engineering, and advanced predictive modeling into an easy-to-understand three-digit risk score. Using CashScore, lenders can instantly analyze deposit account activity to identify sizable populations of borrowers who are better credit risks than their credit histories suggest (and vice versa).

"Our v4 product suite delivers the most powerful tools for cash flow underwriting, and the best statistical performance, of anything available in the market," said Jason Rosen, Prism Data's Founder and CEO

CashScore v4 was trained on an even larger consortium dataset than CashScore v3 and outperforms by a wide margin: a lender adopting CashScore v4 could increase the number of loans they approve by 28% without increasing risk, or reduce the number of defaults in their portfolio by 16%, compared, in each case, to the prior version of the CashScore. CashScore v4 outperforms traditional credit scores on a standalone basis as well, and is orthogonal to those scores, resulting in even better predictive results when they are used in tandem.

Along with the new score, Prism is launching new versions of its Insights, Income and Categories products, as well as Ability-to-Pay (ATP), a new solution that offers an automated and comprehensive analysis of a prospective borrower's income, expenses and free cash flow for use in debt-to-income and ability-to-pay calculations.

Collectively, Prism's next generation of tools improve the accuracy of underwriting decisions across the entire credit spectrum, from subprime to superprime. They also empower lenders to better serve the estimated 76 million U.S. consumers that have little to no traditional credit history. The Consumer Financial Protection Bureau (CFPB) released an analysis last year noting that cash flow underwriting may help fill this sizable gap in the traditional credit system.

"In the decade we've spent developing cash flow underwriting solutions, the last two years have been the most productive thanks to our work with some of the country's largest banks and fastest-growing fintechs," said Jason Rosen, Prism Data's Founder and CEO. "That accumulated wisdom—combined with an expanding universe of data and extensive R&D—has given us a unique perspective and the opportunity to make Prism's scores and analytical products even more impactful for lenders. Our v4 product suite delivers the most powerful tools for cash flow underwriting, and the best statistical performance, of anything available in the market."

Prism's v4 product suite includes:

• CashScore v4: The prior version of the CashScore was the industry's first consortium-based cash flow underwriting score, utilizing millions of de-identified, consumer-permissioned records from a variety of different lenders, credit products, and customer segments. The new CashScore v4 was developed from an even broader data consortium, across a wider spectrum of credit products, with roughly 4x the number of lenders represented. This expanded data set, combined with Prism's cutting edge categorization and feature engineering,makes CashScore v4 even more predictive across the full credit spectrum, including the extreme ends like superprime and deep subprime. CashScore can be used to approve or decline credit applications, similarly to a traditional credit score, with FCRA- and ECOA-compliant adverse action reason codes provided.
• Insights v4: Prism's Insights v4 product transforms raw deposit and open banking data into a library of tens of thousands of attributes. These Insights cover all of the financial activity observable in deposit account records, along with key relationships and dynamics indicative of trajectory, volatility, behavior, and ultimately, risk. With Insights v4, Prism clients can curate a subset of the most powerful attributes for their particular use case, product category, and customer segment. These attributes can be incorporated into rules or credit strategies, or used as features in custom models.
• Income v4: Prism's Income v4 product accurately estimates gross and net income based on deposit transaction activity. Income v4 identifies multiple income sources beyond just the paycheck, including gig work, investment income, government benefits, and more. In addition to a point-in-time estimate, Income v4 also returns details on income trends, stability and volatility.
• Categories v4: Categories is Prism's powerful, proprietary categorization engine, which translates raw deposit account transaction data into clean, simple, and accurate account activity for underwriting. Prism's enhanced Categories v4 product adds more than a dozen new categories, enabling it to identify everything from retirement income, gambling winnings, investments, and loan disbursements to debt settlements, buy-now-pay-later activity, and lease-to-own arrangements. Not only is Categories v4 more granular than the prior version, it is significantly more accurate as well.
• Ability-to-Pay (ATP): Prism's new ATP offering brings "debt-to-income" and "ability-to-pay" assessments into the 21st century using open banking. Prism ATP harnesses the power of accurate, detailed deposit transaction data to provide a comprehensive breakdown of a borrower's income, expenses, and free cash flow in an instant. Prism's assessment is inclusive of standard and non-standard income sources (like gig income and government benefits) as well as monthly obligations that may not be included in a traditional credit bureau file (like rental payments, utility payments, subscriptions, and loan obligations including buy-now-pay-later).

"Our new CashScore products provide a material improvement in lenders' ability to measure and assess risk up and down the credit spectrum," said Erin Allard, Prism Data's President. "Financial providers can use these new analytical tools to more effectively manage risk across every customer segment and asset class, from buy-now-pay-later and auto loans to personal loans and mortgages, unlocking value for lenders, lowering costs for consumers, and driving greater credit access for the underserved."

The CFPB has repeatedly cited cash flow underwriting as one of the primary benefits of its upcoming rulemaking on Open Banking. That rule, which is widely expected to be finalized this month, grants consumers more ownership and control of their financial transaction data, and promises to make it easier for consumers to share their data for processes like cash flow underwriting.

In the lead-up to this historic rulemaking, Prism Data announced it is working with leading credit bureaus and open banking providers, including Equifax and Plaid among others, to make Prism cash flow underwriting solutions and the CashScore broadly available through the partners that banks and lenders currently rely on for data and analytics products.

About Prism Data:

Prism Data is the modern cash flow underwriting solution, helping lenders expand approvals, lower losses, and more, using consumer-permissioned financial transaction data. Prism's API-based, no-PII platform translates raw transaction data from any source into actionable insights and scores including the market-leading CashScore® for credit risk management. Prism's cash flow underwriting solutions were developed over the course of nearly a decade and billions in credit originations, resulting in maturity, reliability, compliance, and predictive-power unrivaled in the market today.

Media Contact
Matt Graves, Prism Data, 1 415-290-3503, matt.graves@prismdata.com, http://www.prismdata.com

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