DATA IS A POWERFUL TOOL to modernize outdated financial systems and
improve access to credit for underserved, underbanked and
credit-rebuilding consumers. As disadvantaged communities continue to
struggle to access mainstream financial services, industry leaders,
academia, government institutions and nonprofits are increasingly
looking to technology as a solution. Cloud-native tech innovation,
integrated data and artificial intelligence are some of the key
drivers in social change – and in powering the Equifax purpose of
helping people live their financial best.
In the United States, Atlanta has grown into a tech and
financial hub and a metropolis with a deep legacy of social impact.
Equifax is part of a broad collective of thought leaders committed
to advancing financial inclusion. Over the past decade, research has
shown that alternative data sources, advanced analytics and decision
intelligence tools can drive inclusion on an unprecedented scale.
Convening a group of experts, ranging from academia to
high-tech leaders, earlier this year, Equifax hosted a panel
discussion at its Atlanta headquarters diving into the topic of
Data-Driven Inclusion. The cross-sector talk was one of the first in
a series led by TechBridge,
a nonprofit committed to breaking the cycle of generational poverty
through innovative technology solutions.
McKnight, Global Head of Social Impact at Google, moderated the
discussion with four panelists: Equifax Chief Product, Data, Analytics
and Technology Officer Bryson
Roseman, Co-Founder and CEO of Steady, a platform solving the
non-standard worker data gap to drive enhanced access and equity; Jessica Washington,
a payments risk expert with the Federal Reserve Bank of Atlanta’s
Retail Payments Risk Forum; and Dr.
Sudheer Chava, a professor of finance and the Alton M. Costley
Chair at the Georgia Institute of Technology.
Understanding the challenges to greater financial inclusion
More than 80 million Americans are either underserved,
underbanked or going through credit repair. The reasons are clear:
lack of access, unemployment, minimum balance requirements, distrust
in financial institutions, and a lack of steady income – to name a
few. In order to remove barriers to financial inclusion, the entire
ecosystem must work together to rethink traditional models and
ultimately enact change.
Atlanta Fed expert Jessica Washington has been at the
forefront of these issues for years, leading research initiatives.
“The root of financial inclusion is to promote financial
health,” Washington said. “To be financially healthy, one must be
economically resilient and have opportunities for economic mobility.
At the Atlanta Fed, we’ve really been trying to understand how
giving vulnerable populations access to financial services that
aren’t just provided by traditional banks could promote economic
mobility and resilience. We’ve found that, outside of the unbanked
population, there are still so many underserved people with a
traditional bank account but that do not have either a credit card
or debit card.”
Adam Roseman, from startup Steady, shed light on a key
population in the mix: the “non-standard workforce.” This group is
broadly defined as individuals who earn income from a source other
than a full-time W-2 job. And while this workforce is growing, its
size is hard to define, precisely because payroll comes through
non-traditional channels, including tips. The Steady co-founders
realized that this population, though vast, was part of a massive data
gap, with earnings that are not as easily trackable.
“We felt that the only way we could solve for and attempt to
tackle this problem was to build a community of workers who were
contributing their data that helped us to better understand the
workforce,” Roseman said. “So much of the underserved worker
community earns from non-standard work, and so many of the
challenges this workforce faces are due to lack of available data.”
Creating predictable pathways out of poverty through data
Without the right data and technology solutions, it will be
difficult to break through barriers. Expanding access to credit can
help communities move their lives forward.
Over the last four years, Equifax has been rebuilt from the
ground up, moving through an ambitious digital transformation
journey. The transition of its IT infrastructure to the Equifax
Cloud has allowed the company to maximize the value and
accessibility of its data. As a result, Equifax is able to better
identify people and understand their immediate needs.
“We are able to bring together more data now than ever
before,” Koehler said. “And when you bring in more data, you surface
a 360-degree view as to who that person is. For example, we recently
conducted a study whereby reviewing other types of favorable payment
information, which is typically not included on credit reports, we
were able to surface creditworthiness to 21% more people who would not
have even hit minimum thresholds in the past.”
Building bridges between corporate America and academia
The academic community plays a critical role in fostering
financial inclusion and creating a community for future inclusion
leaders. Through the Georgia Tech Financial Services Innovation Lab,
Dr. Sudheer Chava explained how faculty and students can access
alternative data sources and credit modeling experts to help fuel innovation.
“As an academic institute, what we try to do is take a step
back and look at not only the initial borrowing, but also for the
long run outcomes,” Chava said. “The hope is that this can help with
product design policy and also inform consumers through financial
literacy. The Equifax-Georgia Tech partnership is a great example of
what industry and academia can do together to advance the public good.”
To learn more about how Equifax is fostering financial
inclusion, visit our Environmental,
Social & Governance hub.