Fintech Flash

In this edition of Fintech Flash, we suggest due diligence questions fintech companies should ask potential bank partners to assess their candidacy.  We also provide context for each question explaining its importance and tips for conducting the due diligence. 

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Traditional credit underwriting methods, which are generally based on credit reports, have not always successfully captured the full picture of a borrower’s ability to repay. It is estimated that more than 45 million US consumers lack sufficient credit history to generate either a credit report or a credit score. Low- to moderate-income (LMI) individuals and underrepresented communities are disproportionally represented in that figure. Approximately 40% of low-income individuals and about 30% of moderate-income individuals have insufficient credit history to generate an accurate credit score. Further, nearly 54% of Black Americans report having no credit or a poor to fair credit score, and roughly 41% of Hispanic Americans are in the same category.

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