Financial Credibility and Liquidity Scores

Planky offer two metrics which are designed to give a high-level view of customer creditworthiness:

The Financial Credibility score has the same goal as a traditional credit score in determining a customer’s ability to repay credit, but greatly increases the scope. The underlying scorecard is constructed from variables extracted from the transaction data of both credit and debit products. Hence credit-like behaviour, such as whether or not someone pays their rent or utility bills, is now picked up.

The Liquidity score has a slightly different aim and speaks to a customer’s capacity to repay credit. In other words, do they have the required financial clout to successfully service debt.

This section looks at each of the above in detail.

Scores for customers are located in their report. To access reports:

1. Navigate to the Reports panel in the Dashboard
2. Insights are only available for those customers who have shared data. Customers who have shared data have the Ready button next to their name. Click on this for their customer report.

This will take you to the customer reports page.

Customers who have connected both types of accounts, insights for personal and business are located on separate tabs which can be toggled via the report tabs (see below).

Now we will look at each component of the Insights product as it appears in the customer report.

The Financial Credibility score has been designed to measure the propensity of a customer (personal or business) to default on credit. The underlying scorecard comprises a non-statistical expert judgment model built from credit risk metrics, all of which are extracted from bank transaction data. These metrics have been selected on the basis of either:

• having a proven industry track record of predicting credit risk (for example, credit usage)
• being likely predictors of credit risk (for example, regular mortgage/rent payments)

The former set generally comprise more traditional credit risk variables (similar to those which may be found in credit bureau data), while the latter contains metrics which have not formed part of traditional scorecards but are now available through transaction data.

The score is presented in the customer report as shown below:

The reason codes are displayed to the right of the score bar, show the factors which contribute most significantly to the score value. Reason codes highlighted red (green) indicate a negative (positive) contribution.

The financial credibility score for personal accounts is based on a different set of metrics than the score for businesses. There is consequently a different set of reason codes for each.

The Financial Credibility score ranges between 0 (customers most likely to default) and 1000 (customers most likely to repay credit).

The Liquidity score quantifies the near-term funds available to a customer. It quantifies the probability that a customer’s account balance will hit zero within 90 days, which is inferred from modelling a customer’s balance history. This is useful in determining a customer’s capacity to repay credit.

Additional metrics are shown within the liquidity panel. The aim of these is to add some interpretability to the score.

The chart below shows how Liquidity score values are to be interpreted.