A vision for the future of financial services
In today's rapidly evolving financial landscape, we stand at pivotal crossroads. Financial institutions and fintechs have traditionally relied on a narrow set of data points to make critical decisions about who to serve, how to assess risk, and which products to offer.
But what if I told you we're only seeing a fraction of the picture?
At Flinks, we've spent years connecting financial institutions and services to the data they need, enabling seamless verification processes, and building enrichment capabilities that transform raw financial information into actionable insights.
Yet we've always known there was more to the story.
The future of finance isn't just about banking data—it's about embracing the rich tapestry of alternative data sources that can revolutionize how we understand and serve customers.
Here's something I've noticed: throughout my time at Flinks, our customers have consistently asked for more data. My inbox regularly sees questions like "Do you support this source?" or "Can you integrate with that system?.
The constant drumbeat of these requests tells me something important: our customers need data that's difficult to access, and they're looking to Flinks to solve this problem.
Enter alternative data sources
Alternative data represents any non-traditional information used in financial decision-making that falls outside standard credit reports, bank statements, or official disclosures. It's the missing piece in a puzzle that, when complete, reveals a holistic view of consumers and businesses that traditional data alone simply cannot provide.
Before we dig deeper into how alternative data will transform the industry and how Flinks will be at the forefront of this movement we must first define the concepts clearly.
You see, we've never defined ourselves as just an "open banking company" or a "transaction data provider" – we're Financial Links (that's what Flinks stands for, after all). Our mission has always been to make complex financial use cases simple and accessible, and expanding into alternative data is the natural next step in that journey.
Understanding Open Data, Alternative Data, and Open APIs
Before diving into the transformative potential of alternative data, it's essential to clarify the landscape of different data types and access methods in financial services today.
Open Data vs. Alternative Data
Open Data refers to information that is publicly available, freely accessible, and can be used by anyone without restrictions. It typically comes from government agencies, international organizations, research institutions, and non-profits. Examples include census data, weather information, public transportation schedules, and COVID-19 statistics.
This data is generally structured, well-documented, and available at no cost or under open licenses.
In contrast, Alternative Data refers to non-traditional information sources used for financial analysis, business insights, or market intelligence. Unlike open data, alternative data isn't inherently public; it's often privately held, purchased from providers, or aggregated from various sources. This includes utility payment records, payroll information, geolocation data, social media sentiment, satellite imagery, and more.
Alternative data typically requires significant processing to extract meaningful insights and is valued for providing unique perspectives that traditional data sources don't capture.
The key differences lie in their accessibility (public vs. often private), sources (government/academia vs. private firms/platforms), and typical usage (research/public interest vs. business/investment decisions).
How Open APIs play a role
It's important to understand that Open APIs are fundamentally about how data is accessed, while Open Data and Alternative Data describe what type of data is being accessed:
- Open APIs are the technical mechanism that enables programmatic access to data or services
- Open Data is publicly available information that can be downloaded or used freely
- Alternative Data consists of non-traditional information sources used for business intelligence
Examples of Open APIs include Google Maps API, Twitter API, and weather service APIs. They may be freely available or require authentication through API keys, and sometimes include rate limits or tiered pricing models for heavier usage.
In financial services, Open APIs have become crucial for accessing both traditional banking data and alternative data sources.
Types of Alternative Data in financial services
With these distinctions in mind, let's explore the types of alternative data that are transforming financial services:
- Payment history for recurring obligations like utilities, telecom, and rent
- Utility data including gas, electric, and water payment histories
- Employment and income data from payroll systems or global gig economy platforms
- Property ownership and rental records including land registry information
- Cash flow patterns from various accounts
- Government records including tax filings and other public sector datasets
- Public market datasets such as SP500 index and other non-credential required information
- Credit score data from alternative credit assessment sources
- Subscription services data from platforms like Netflix, Amazon, and Shopify
- Crypto assets data providing insights into digital wealth holdings
- Device and geolocation data
- Online footprints and behavioral signals
- Registry information from various databases such as land registers and death registries
What makes alternative data exciting is that while traditional banking data gives us insight into a customer's financial transactions, alternative data provides context around their entire financial life.
It tells us not just what a customer did, but potentially why they did it, and what it means for their future financial health.
For example, consistent utility payments won't typically improve someone's credit score, but they're an excellent indicator of financial responsibility. Similarly, a stable employment history verified through payroll data or gig economy platforms provides more reliable income verification than bank deposits alone.
These insights create a more nuanced picture that can lead to fairer, more inclusive financial services. By incorporating data from public datasets, government sources, subscription services, and crypto holdings, financial institutions can develop a comprehensive understanding of consumers' financial behaviors beyond traditional banking data.
Why Alternative Data matters now
The financial industry is experiencing several converging factors that make alternative data more relevant than ever:
Changing Customer Expectations: Digital natives expect seamless, personalized experiences. They're also more willing to share data in exchange for value—if they trust you with it.
Financial Inclusion Challenges: Traditional evaluation methods exclude millions of "credit invisible" consumers who lack conventional credit histories but are nonetheless financially responsible.
Technology Advancements: AI and machine learning can now process unstructured data at scale, extracting meaningful insights that were previously inaccessible.
Competitive Pressure: Fintechs are already leveraging alternative data to acquire customers that traditional institutions might overlook, creating urgency for established players to evolve.
Regulatory Evolution: Regulators in both the US and Canada have shown measured support for alternative data when used responsibly to promote financial inclusion.
In this environment, alternative data isn't just a competitive advantage—it's becoming table stakes for institutions that want to remain relevant.
Transformative use cases for financial services
Alternative data is already reshaping financial services in tangible ways across several key areas:
1. More inclusive credit decisions
By incorporating data like rent, utility, and telecom payment history, lenders can identify financially responsible individuals who lack traditional credit histories. Leading fintechs have demonstrated that alternative data can enable up to 27% more loan approvals with lower interest rates, without increasing risk.
2. Streamlined KYC/KYB processes
Alternative data enables automated identity verification through authoritative sources rather than manual document collection. For example, one institution reduced their business verification time from 48 hours to under 20 minutes, resulting in a 35% increase in completed applications.
3. Real-time income & employment verification
Direct verification from payroll systems and tax filings provides faster, more reliable income assessment than traditional document review, reducing both processing time and fraud risk.
4. Enhanced fraud detection
Device data, geolocation matching, and behavioral patterns help identify suspicious applications and provide early warning signs of financial stress, allowing for proactive intervention.
5. Personalized financial products
A deeper understanding of customers enables more relevant product offerings, such as tailored savings solutions for gig workers or identifying high-net-worth prospects through property holdings and private investments that wouldn't appear in traditional financial records.
How AI and Open APIs enable alternative data at scale
Leveraging alternative data would be impossible without modern technology—specifically, open application programming interfaces (Open APIs) to gather the data and artificial intelligence to interpret it.
Unlike traditional data or even open data, which is often neatly structured, alternative data can be highly unstructured and heterogeneous. Open APIs enable institutions to connect to various data sources—banks, payroll systems, utility companies, government databases—through a single integration point, standardizing how this diverse information is accessed. Meanwhile, AI and machine learning transform this raw information into actionable insights.
For example, an AI model can analyze thousands of transactions to categorize each one, calculate income averages and volatility, identify expense ratios, and flag anomalies—essentially producing a summary of a customer's financial health. Natural language processing can scan unstructured text from various sources to extract relevant insights. These technologies pick out the signal from the noise, making alternative data practical at scale.
The result is a system where financial institutions can make data-driven decisions in seconds that would have previously taken days of manual analysis—if they were possible at all.
Think about what used to happen when you encountered inconsistent date formats: Chinese dates, US dates, Canadian dates—each requiring custom engineering to standardize. Today's AI can automatically recognize and normalize these variations without human intervention. What previously required unique engineering for each source can now be handled through intelligent, adaptive systems that learn and improve over time.
This technological shift is what makes alternative data truly accessible to all financial institutions, not just those with massive engineering resources. The complexity is abstracted away, letting you focus on using the insights rather than struggling to obtain them.
Building the future: Democratizing financial intelligence
At Flinks, we see ourselves as the intersection of raw alternative data, open data, and actionable financial insights. In our journey we’ve evolved from providing Canadian transactional bank data to expanding into the US market, document processing, enrichment and insights, and now toward a comprehensive data strategy that encompasses both open banking and alternative data sources.
Our immediate strategic intent is to democratize alternative data—making it accessible, usable, and valuable for all financial institutions, regardless of their size or technical resources. Despite its potential, alternative data is still fragmented, complex, and difficult to access.
Flinks intends to change this by:
- Leveraging AI-powered technologies to efficiently standardize and deliver alternative data through a unified framework, just as we've done with banking data
- Creating pre-built connectors to high-value alternative data sources that handle the heavy lifting of integration, normalization, and enrichment
- Ensuring seamless integration with customers' existing data infrastructure through flexible APIs and webhooks that fit into your current workflows
- Developing intuitive dashboards and visualization tools that make alternative data insights accessible to business users, not just data scientists
This democratization means that regional lenders, financial institutions, credit unions, and fintechs can easily harness powerful data, leveling the competitive playing field while advancing financial inclusion for consumers.
Connecting the dots
Our current product suite already lays the groundwork for the alternative data future. The Flinks ecosystem we've built for banking data provides the perfect foundation for our expansion into alternative data sources.
Our connectivity solutions establish secure, consent-driven access to financial data. Our payment capabilities demonstrate our ability to handle sensitive workflows where verification and action occur seamlessly. Our data enrichment technologies transform raw information into actionable insights.
These core competencies—connectivity, security, and data intelligence—are precisely what's needed to make alternative data accessible and valuable. The robust infrastructure that currently ensures reliable connections to thousands of financial institutions can be extended to utility providers, government databases, property records, and other alternative sources.
This isn't a radical departure but a natural evolution of our existing capabilities. Flinks doesn't just connect to data—we make it meaningful.
As we expand into alternative data, we'll maintain the same high standards for reliability, security, and value that our partners have come to expect, while opening up new possibilities for deeper financial insights.
I'd love to hear about the data challenges you're facing in your organization. What data would help you make better decisions, serve more customers, or create more personalized experiences? Connect with me on LinkedIn or contact us to discuss your needs further and share your thoughts.
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