Equifax Australia and Mastercard launch ‘Open Score’ to improve financial inclusion

Source: Equifax

Equifax Australia and Mastercard have announced a new strategic relationship, bringing together data and analytics capabilities from Equifax alongside Mastercard Open Finance solutions to deliver new and innovative products to the Australian market designed to create greater financial inclusion.

The first milestone in this ongoing collaboration is the launch of Equifax Open Score, an innovative new bank transaction score designed to support the more than 2.5 million Australian consumers with limited or no credit history who may still need access to financial services. This includes young people, new migrants and those re-entering the credit market – groups often overlooked by traditional assessment models.

Open Score helps individuals better understand their financial position and take steps toward long-term financial wellbeing. By unlocking new insights from bank transaction data, the new score also promotes greater financial inclusion, opening up opportunities for those who’ve historically been underserved.

Developed by Equifax, a global data, analytics and technology company, and leveraging Mastercard’s global Open Finance network, Open Score utilises secure consumer-consented bank transaction data obtained through the Consumer Data Right (CDR). This data, which includes income, expenses and spending patterns, is analysed in real-time to assess a consumer’s financial health. The result is a score between 0-10, presented alongside other key contributing factors to help consumers understand what influences their score.

Open Score is designed to help consumers improve their financial awareness and uncover new insights about their financial health as well as enhance financial inclusion. It achieves this by:

• Providing key contributing factors to explain to consumers what is impacting their score. By influencing the key contributing factors, consumers can improve their score to put themselves in a better position when they are ready to apply for credit.
• Making more credit invisible consumers – those with little or no credit history – visible to lenders and financial services providers.
• Offering transaction alerts highlighting key behaviours within a user’s data. Consumers can use these alerts to better understand their expenses and identify any unusual or fraudulent transactions to help protect themselves against scams.
• Including a Confidence Metric to indicate how reliably the score represents a consumers’ financial wellbeing.
• Using banking transaction data to provide insights into a consumer’s income, expenses and spending patterns.

A stepping stone to empower underserved consumers

According to Melanie Cochrane, chief executive officer of Equifax A/NZ, Open Score will empower more Australian consumers to take a more active role in managing their financial health and will be especially powerful for those who have historically had limited access to credit.

“By tapping into alternative data like income, expenses or rental payments, Open Score can uncover insights into consumers that aren’t available with traditional credit reporting information. These insights will assist all Australians, but will be especially powerful for consumers who have traditionally been credit invisible.

“Equifax is proud to have developed Open Score, and to be working with Mastercard to launch an offering that will assist with increasing financial inclusion for this cohort and support more Australians to live their financial best,” said Cochrane.

Open Score is powered by Mastercard’s accredited Open Banking platform, giving consumers peace of mind that their banking data is shared securely across Mastercard’s trusted network. Built on the principle of consent by design, consumers have full control over their data, and sharing only happens securely, in real time, and with their explicit permission.

“Open Score empowers Australians to use their own data more easily and securely to help improve financial literacy, manage budgets, and make more informed borrowing decisions,” said Brenton Charnley, vice president, Open Banking, Australasia at Mastercard.

Further reading: Cardstream collaborates with Mastercard on Open Banking payments