Just Economy Conversations: Leveraging Open Banking Data for Smarter CDFI Small Business Lending

The COVID-19 pandemic accelerated the adoption of digital technology in financial services, transforming how consumers and small businesses access credit. Open banking—the secure sharing of customers’ financial data with third parties— offers a promising opportunity to expand credit access for underserved small businesses that have been shut out of traditional financial services due to the risks, costs, and uncertainties of microlending to new and smaller enterprises. Community Development Financial Institutions (CDFIs) are well-positioned to leverage open banking technology, particularly electronic cash-flow data, to further their mission of providing capital to underserved entrepreneurs. However, many CDFIs are still navigating how to leverage this technology and integrate it into their credit processes. This webinar will (1) provide insights from the latest research on the potential for electronic cash-flow data to expand access to credit for underserved entrepreneurs; (2) feature firsthand accounts of challenges and successes from CDFIs that have piloted open banking solutions to expand their small business lending; (3) discuss how digital transaction data can supplement traditional underwriting approaches; and (4) offer recommendations for CDFIs interested in exploring the use of electronic-cash flow data. The session will feature speakers from non-profit research organization FinRegLab alongside CDFIs that have tested the use of electronic cash-flow data. It will end with a Q&A from the audience.

Key Topics: CDFI, Open Banking, Access to Credit, Digital Transaction Data

Panelists:

• Arvind Bala – Mission Asset Fund
• Kelly Cochran – FinRegLab
• Rey Garcia – Texas National Bank
• Brad McConnell – Allies for Community Business
• Karla Renschler – FinRegLab

Moderator:

• Mac McNeil – NCRC Community Development Fund