Ivo Bozukov is Global COO at Whizmo, bringing financial services to underserved communities across Africa, the GCC and Latin America.
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One lesson I have taken from working across financial markets is that a lack of conventional credit history does not mean a lack of financial responsibility. In East Africa, the Gulf and parts of Latin America, I have seen financially disciplined individuals who struggled to access credit because their financial history was largely invisible to traditional credit bureaus.
The United States faces a similar challenge. Nearly 50 million Americans are considered credit invisible or unscoreable, which means lenders have no reliable way to judge whether they will repay a loan. That figure translates to roughly one in five adults, and it includes all the financially independent people who pay their rent on time and manage their monthly commitments yet have no credit history because they have never held a credit card.
For years, the only route to building credit was patience: opening a card, making small payments and waiting for the bureaus to build a file. Cash-flow underwriting takes a different approach by looking at financial behaviour. I believe that makes it worth serious consideration, although I would not describe it as a complete solution. Here’s what lenders should know:
How Cash Flow Underwriting Actually Works
The underlying idea of cash flow underwriting is not new. For years, loan officers have manually reviewed bank statements when assessing applicants. Open banking infrastructure can extend that capability beyond individual manual decisions, allowing lenders, with consent, to consider patterns in income, expenditure and balance behaviour more systematically.
One area where I see potential is among workers whose income is real but structurally difficult to document. A gig worker may be earning from three different income streams and have no employer to provide a clear employment record. With consumer permission, transaction data can provide lenders with another view of income patterns over time, along with documents such as payslips or tax returns. TransUnion refers to this as “trended credit data,” which captures financial behaviour rather than relying on a single credit position. Research from FinRegLab shows that cash-flow data can provide predictive signals of credit risk comparable to, and sometimes exceeding, traditional bureau data.
What This Means For Borrowers And Lenders
The potential advantage for borrowers is greater visibility. Someone with a thin credit file may have more financial information available than a traditional score can capture. For lenders, the opportunity is to simply supplement the data. This is because transaction-based indicators can allow better detection and risk segmentation and help organizations evaluate consumers with thin files and newcomers to credit who were not assessed using bureau-based models.
The case for cash-flow underwriting is also what consumers are willing to share. Experian’s analysis of cash-flow underwriting found that many consumers would be willing to share banking data if they believed it could improve their chances of obtaining credit.
Where The Regulatory Picture Stands
In the United States, the current situation with regulations illustrates how uncertain the field of cash-flow underwriting remains. In 2024, the Consumer Financial Protection Bureau published its Personal Financial Data Rights rule that provides consumers with the right to share their account details, under Section 1033. It was meant to provide a sound legal basis for large-scale consumer-consented data exchange. However, it was challenged in court as soon as it was finalized. A federal court blocked its enforcement in October 2025, and it is now under reconsideration, with the CFPB itself arguing that some of its provisions go beyond its authority. I take this as proof that the framework for cash flow lending is still evolving in the U.S. while various other markets have already started implementing their open banking regulations at different speeds.
Lessons From Emerging Markets
This is where my personal experience has shaped my perspective. In regions such as East Africa, the Gulf and some parts of Latin America, there is often little or no established organizational framework, but the emerging use of mobile banking and electronic wallets creates the necessary basis for the kind of transaction history needed for cash flow-based lending. In my experience working for a company that operates in the payments and digital wallet space, I have seen this mechanism work not as a supplement to traditional credit scoring and more as the primary way people build a financial identity at all. This creates different opportunities in lending markets, and I think it will be more significant in the coming years.
The Limits Of The Model
None of this comes without real limitations, and I would be remiss not to mention them. Transaction data is not categorized across different markets, which makes it difficult to create models that would function consistently everywhere. Consent and data security systems are more advanced in some systems than in others, and trying to accelerate this in the market carries real privacy risk.
There is also a subtler concern: Models trained mostly on data from banked, digitally active populations can end up encoding new forms of bias even as they claim to solve an old one. Cash flow underwriting offers advantages over previous protocols, but it does not replace the challenging stage of constructing reliable data systems on a market-by-market basis.
I don’t think traditional credit scores are going away. I think that the line between a credit score and a person’s real-time financial behavior will keep blurring, and that the institutions willing to build patiently, with consent and local context at the center, are the ones that will benefit most from that shift.
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