Open Banking: Are Businesses Profiting from Their Data?
Fintech firms are emerging as key players in alternative business finance by leveraging open banking and data analytics. They collect and process business data to generate credit scores and provide funding.
Financial technology startups, such as Defacto and Silvr, have become significant entities in France's alternative business finance sector. They specialize in gathering, refining, and structuring corporate data, particularly banking and financial information, utilizing open banking and API technologies.
These companies process substantial amounts of data, including bank statements, customer and supplier billing histories, and activity from e-commerce and advertising platforms. This aggregated data is then fed into proprietary algorithms designed to evaluate and score businesses seeking funding.
The core expertise of these firms lies in their credit scoring and lending algorithms. These aim to offer cost-effective financial products enhanced by data aggregation, streamlined digital processes, and rapid decision-making. Despite a tightening liquidity environment for fintechs, these companies continue to attract investors and strategic partners.
Silvr has secured approximately €330 million since 2022, and Defacto has obtained €167 million. This trend prompts questions about how businesses are truly deriving value from their data in this evolving financial landscape.