Equifax is set to provide peer-to-peer lender Zopa with “deeper insights” into customer behaviour.
Forget about “big/smart data” for a moment. It’s Credit Reference Agency (CRA) data that fuels the vast majority of online lenders. Zopa – the UK’s original peer-to-peer lender – is no exception. The platform has been buddied up with Equifax since its inception in 2005. Now the pair have struck a new contract that will see Equifax provide “deeper insights” into customer behaviour, with the broader purpose of allowing Zopa to better understand the performance of its loan portfolio, and thus to offer better borrowing rates to loyal customers.
In practical terms, the new agreement opens up access to a fuller set of Equifax customer data, allowing Zopa to delve further back into the credit history of a borrower, and to make a more comprehensive assessment of a borrower’s risk profile.
Jaidev Janardana, CEO of Zopa, offered his thoughts on the new partnership:
“Equifax has extensive experience of the P2P sector and its in-depth understanding of our business needs, coupled with the strength of its data, plays a vital role in ensuring we offer the best customer experience possible.
“During our long-term relationship we have always been impressed by the client service Equifax offers, both in terms of tailored solutions and the team’s responsiveness. Technology is a key focus and area of investment for our business, but to maximise the effectiveness of this technology it must be supported by the most powerful data available. During our selection process we were convinced that Equifax was the best provider to work with as we grow our business further.”
Jaidev’s arrival at Zopa as COO in October 2014 prompted a rejigging of Zopa’s credit decisioning process. In short, this shift amounted to utilising data from multiple bureaus and, perhaps more importantly, to the more effective usage of affordability data. Jaidev’s tinkering resulted a swift uptick in conversions, from between 14-5%, to around 18-19%. The changes also reduced turnaround times for borrowers, whilst also offering loan applicants a more predictable outcome from the outset. In short, Zopa’s credit engine appears to be in good hands. We’ll keep an ear to the ground for word on the impact of the new Equifax arrangement.
Craig Tebbutt, Head of Alternative Lending at Equifax, commented:
“The deeper customer insights we are now providing will help Zopa maintain its strong market position and keep pace with rising borrower demand. 2016 will be a key year for Zopa; volumes of institutional funding are growing and retail customers will be eligible for the new Innovative Finance ISA (IFISA) from 6th April. These advances demonstrate the tremendous growth potential in alternative lending.”