Plaid launches credit, fraud and payment risk AI models

Plaid is launching new AI-driven models that will change how you approve customers for financing. These tools use artificial intelligence to analyze real-time bank data rather than just relying on old-school credit scores. For retailers, this means you might soon see higher approval rates without taking on extra risk. The technology looks at a customer's actual cash flow and spending habits to predict their ability to pay. The update includes three specific tools. First, a credit model that helps lenders spot 'invisible' creditworthy customers who might have a thin credit file but a healthy bank balance. Second, a fraud detection tool that analyzes how a user interacts with an application to spot bots or stolen identities. Third, a payment risk model that predicts if a transaction will bounce before it is even processed. If you use financing platforms that integrate with Plaid, expect smoother onboarding for your customers. These models aim to reduce the 'friction' of manual document uploads, like paystubs or bank statements. By automating the verification process, you can close deals faster while keeping your fraud losses low. This is a significant step toward 'instant' approvals for high-ticket items like furniture, jewelry, or automotive repairs.

Source: Finextra — Lending

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