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New Envestnet | Yodlee Product to Target Online Lenders?

By Ryan Weeks on 12th April 2016

Envestnet | Yodlee has launched its new “Risk Insight” solution – which will provide lenders with a more holistic view of consumer bank account and spending activity.


Envestnet | Yodlee is a data aggregation and analytics platform which caters to digital financial services providers. Over 950 companies – including 12 of the 20 largest US banks – subscribe to the platform. Yodlee was acquired by Envestnet in August 2015 for approximately $590m.


Online lenders will be one of the primary target customer groups for the newly minted Risk Insight solution. Yodlee already counts hundreds of internet services companies amogst its users. The company yesterday participated in the “Product Development Using Data” panel at LendIt USA – one of the best-established shop windows in the online lending industry.


Practically speaking, Envestnet | Yodlee believes that the Risk Insight tool will allow lenders to make more informed, data-based decisions when evaluating borrowers. Borrower information is collated electronically and transmitted directly and seamlessly to lenders. The Risk Insight tool contains data from a borrower’s bank and other accounts, including transaction information. The emphasis here is on the present. Credit bureau data, conversely, tends to be backward looking – centred instead upon a borrower’s historical interaction with credit.


The new Risk Insight product may well be of interest to platforms like SoFi, which famously cut ties with FICO in January this year. The cause of this disconnect was that SoFi – which lends exclusively to young professionals – is built around a credit process which is forward-looking, rather than backward-looking. The new Envestnet | Yodlee offering may or may not be of interest to SoFi, but one would have to think that it stands a better chance of providing value than traditional credit bureau data.


Terry McKeown, Practice Manager in Credit Analytics at Envestnet | Yodlee, offered his thoughts:


“By introducing this new solution we are essentially enabling lenders to make more informed underwriting decisions, and ultimately improving approval rates to help mitigate credit losses. Our solution is fast, comprehensive, and precise. We’re looking forward to seeing the results for financial institutions on our platform as they begin to use the data provided by the Risk Insight API.”


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