Mastercard was announced today as the preferred open banking provider for Bonifii’s participating credit unions to access consumer-permissioned bank data to inform underwriting for different loan types across mortgage, auto, personal and small business.
Financial institutions are facing growing pressure to be ‘digital ready’ or ‘digital by default’ due to the shifting desires of consumers led by Millennial and Generation Z consumers.
According to research conducted by Morgan Stanley, millennials are the largest driver of net new loan demand and will continue to be for at least the next eight years. Research shows that 80% of smartphone-carrying Gen Z members are already using mobile banking and shifting needs of the fintech marketplace.
MemberPass, powered by Bonifii™, is a digital ID that utilizes distributed ledger technology and FIDO principles, currently issued by credit unions. With the help of Mastercard, Bonifii members can add consumer-permissioned data in addition to MemberPass digital identity solution to help individuals access capital needs securely.
“MemberPass is the gold standard in the digital identity verification market, and as Bonifii’s preferred open banking provider, Mastercard will enable credit unions to step into the digital frontier through the use of consumer-permissioned data,” said Bonifii’s CEO John Ainsworth. “Complementing the current credit rating system by leveraging verification of income and assets for auto, personal and mortgage lending.”
Finicity’s open banking platform from Mastercard delivers verification of income, asset, and employment reports directly to credit unions during the underwriting process, all built with consumer-permissioned data from the borrower. This technology enables credit unions to offer a digital-first method through which their borrowers can instantly provide the required information that the credit union needs to make a lending decision and replaces manual processes historically associated with the underwriting process for both the borrower and the lender.
"Mastercard’s open banking technology provides a growth opportunity for credit unions to expand account opening, lending and loan servicing”, said Andy Sheehan, EVP, U.S. Open Banking at Mastercard. “Mastercard’s ability to immediately verify account information, via open banking technology and consumer-permissioned data, will be imperative for competitive financial institutions, and digitizing account verification to enhance and better inform underwriting methods will play a critical role in the future of loan processing.”
Mastercard’s open banking technology also reduces the potential for fraud and other potentially time-consuming inaccuracies that credit union underwriters face daily. Together, Bonifii and Mastercard will allow for a more safe, secure and private opportunity for consumers to permission their data to verify identity and account ownership during the lending process.