Leveraging BNPL Data in Consumer Banking

Buy Now, Pay Later (BNPL) services are transforming consumer finance by offering lightly regulated short-term credit. This policy brief explores how BNPL data can be leveraged to improve credit risk assessments and enhance financial inclusion. Drawing on proprietary data from a Nordic bank, our research highlights how BNPL lending and the associated repayment histories can increase loan approval probabilities, lower interest costs for low-risk consumers, and promote better borrowing behavior. The findings suggest that integrating BNPL data into mainstream credit evaluations could improve lending practices, particularly for underserved populations. This brief also provides policy recommendations that can contribute to BNPL remaining a beneficial financial tool while safeguarding consumers from potential risks.