Fintechs give Experian a revenue boost
Experian has highlighted the role of fintech firms in boosting its revenue for 2021.
The credit reference agency, used by traditional banks as well as peer-to-peer lenders to underwrite and assess borrowers, reported revenue growth for the year of 17 per cent to $6.2bn (£5bn).
Its profits for the year were up 34 per cent to $1.4bn.
Business-to-business (B2B) relationships, such as P2P lenders using its service to assess loan applications, were up eight per cent.
This compared with a 19 per cent boost in its revenue from consumer services such as letting users download and monitor credit reports.
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“Volume growth was strong reflecting new credit prospecting and loan origination activity by our clients,” Experian said in its annual report.
“Our new business performance was very strong, and we gained client mandates from across a wide spectrum, including in traditional banking, fintech, buy-now-pay-laterr and insurance.
“Clients recognise the superiority of our data assets, where we have placed specific emphasis on expanding population coverage, as well as on enhancing the quality of our data.
“This increased richness has increased credit visibility, while at the same time enhancing pinning, matching and the performance of our scores.
“When coupled with our broad analytical capabilities, this has contributed to the success we have seen in securing new mandates and to our improved revenue performance.”
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Steve Clayton, a fund manager for Hargreaves Lansdown Select, who holds Experian in his portfolio said the brand’s services will become more critical as economic conditions worsen.
“Experian’s B2B operations are enjoying strong demand, helping corporates to make decisions about the best prospects for lending and how to structure their marketing campaigns,” he said.
“Going forward though, both consumers and corporates are likely to find the going get tougher.
“Experian’s core credit bureau operations should enjoy some counter-cyclicality. Helping banks and other lenders to determine the financial health of their clients becomes more and more critical the worse economic conditions become.
“These services should see increased demand, even if demand for lending and marketing advisory services is suppressed.”