By Daniel Lanyon on Tuesday 9 February 2021
M&A is a growing trend in the fintech world but the acquisition of Accountscore by Equifax is the first major open banking play to close from a major corporate, following the halted Visa/Plaid deal last month.
Global credit referencing giant Equifax has acquired AccountScore in bid to boost its open banking strategy.
Accountscore, led by CEO Emma Steely since 2018, has been working closely with Equifax for several years and approval for the acquisition has been received from the Financial Conduct Authority (FCA) the UK regulator.
Credit reference agencies, which sell information to lenders and other financial services organisations have stayed close to the growth of open banking, where users allow bank transaction to be shared with third parties.
This has been particularly true in the UK, but the deal between Equifax is first of its kind whereby a credit bureau has fully acquired an open banking fintech startup.
M&A is a growing trend in the fintech world but the acquisition of Accountscore by Equifax is the first major open banking play to close by a major corporate, following the halted Visa/Plaid deal last month.
The acquisition, Equifax says will enhance its consumer and commercial product offerings, combining traditional credit bureau information held by Equifax with bank transaction data, facilitated by AccountScore.
“Integration of these new data assets will enable Equifax clients to benefit from higher rates of automated, digital income verification, to carry out more granular assessments of affordability and expenditure and offer more predictive and inclusive credit scoring, by using the most up-to-date information available,” Equifax said in regulatory filings to the stock market.
Put another way, Equifax says individuals and businesses will be better able to demonstrate their creditworthiness by enabling information that isn’t currently used to be taken into consideration.
“This approach enables financial inclusion for those with ‘thin’ credit files, increasing their potential access to credit at a time of great financial uncertainty,” Equifax added.
Patricio Remon, President of Europe at Equifax, says the deal signals Equifax’s commitment embrace innovation and will bring many benefits for its customers.
“More than 2.5m UK consumers and businesses now use open banking-enabled products to manage their finances, access credit and make payments. This growth is helping to empower a generation of consumers, giving them more control over their own financial information, offering them greater access to a wider range of financial products and making it much easier to complete simple digital applications.”
Emma Steeley, CEO at AccountScore, said: “AccountScore and Equifax have an established and successful partnership, having collaborated on a number of products and offerings over the last two years. This acquisition allows AccountScore to accelerate its growth and reach new customers, backed by a powerful global company.
“Open Banking is going from strength to strength, with the adoption in both the consumer and SME markets growing rapidly each month. We have seen lenders power improved credit decisions and account management processes using Open Banking to ultimately better service their customers.”
