Fintechs boost Experian’s revenue
Experian highlighted the role of fintech companies 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, posted revenue growth for the year of 17% to $6.2 billion ( £5 billion).
Its profits for the year rose 34% to $1.4 billion.
Business-to-business (B2B) relationships, such as P2P lenders using its service to assess loan applications, grew 8%.
That compares with a 19% increase in its revenue from consumer services, such as the ability for users to download and monitor credit reports.
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“Volume growth was strong, reflecting new credit prospecting and loan origination activities from our customers,” Experian said in its annual report.
“Our new business performance has been very strong and we have won mandates from clients across a broad spectrum, including traditional banking, fintech, buy-it-now-pay-later, and insurance. .
“Customers recognize the superiority of our data assets, where we have placed particular emphasis on expanding population coverage, as well as improving the quality of our data.
“This increased wealth has increased credit visibility, while improving the pinning, matching and performance of our scores.
“Combined with our extensive analytical capabilities, this has contributed to the success we have seen in securing new mandates and improving our revenue performance.”
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Steve Clayton, fund manager for Hargreaves Lansdown Select, which holds Experian in its portfolio, said the brand’s services will become more critical as economic conditions deteriorate.
“Experian’s B2B operations are enjoying strong demand, helping businesses make decisions about the best lending prospects and how to structure their marketing campaigns,” he said.
“In the future, consumers and businesses are likely to find things more difficult.
“Experian’s core credit bureau operations should benefit from some counter-cyclicality. Helping banks and other lenders determine the financial health of their customers is becoming increasingly critical as economic conditions deteriorate.
“These services are expected to see increased demand, even as demand for loan advisory and marketing services is suppressed.”