Welcome back to the Fintech Takes podcast. I'm Alex Johnson, joined by Rich Franks (a fintech advisor and consultant with 20+ years in credit risk across both the bank and fintech sides), for a new episode of Facing Credit.

This one's about credit scoring. And it’s about why the market has changed more in the last year than in the prior 30.

The FICO monopoly has cracked. Federal regulators opened the mortgage market to competing scores. Cashflow underwriting arrived with roughly 30% predictive lift over traditional bureau data. Block built a proprietary score from Cash App transaction data, and plans to sell it to third-party lenders. Plus, a new generation of cashflow scoring companies (including Prism, Plaid's LendScore, Nova Credit, Pave, and CloutScore) are all competing in the market for a top spot.

Rich and I dig into:

Why even 80% conversion on the bank account linking step still kills a lending funnel, and what it takes to solve friction

Why FICO's cashflow answer had an architectural problem, and why lenders started looking elsewhere

The fair lending risks hidden inside merchant-level transaction data

What makes Block's Cash App Score innovative, and the game theory question it raises if large depositories start thinking the same way

Tune in for Rich's take on where the cashflow scoring market consolidates, what the end of FICO's de facto monopoly means for lenders and consumers, and whether AI resolves or accelerates the fragmentation.

This episode is brought to you by Persona. 

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Fintech Takes listeners can get a full free year through Persona’s Startup Program at withpersona.com/ftt

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LinkedIn: https://www.linkedin.com/in/richfranks/

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