Algoan launches the Algoan Index: an analysis of the financial health of French borrowers

Thanks to the power of Open Banking data, it is now possible to more accurately measure the credit risk of French households and prevent overindebtedness.

It is with this mission in mind that we publish the Algoan Index: an analysis of the financial health of French borrowers, based on advanced credit risk indicators.

The Algoan Index addresses three themes through different indices:

• The evolution of Open Banking adoption in a credit granting context (i.e. the proportion of individuals willing to share their banking information during the credit granting process).
• Assessment of creditworthiness, reflected in the Algoan Score*.
• Assessment of creditworthiness through a number of relevant financial metrics, including cash flow, income, financial management (use of bank overdraft) and the existence or absence of financial vulnerabilities (foreclosure, cheque rejection, overdue payments, etc.).

*Algoan Score reflects the credit applicant's financial behavior. It is calculated from the 3 months of banking history preceding the credit application.

Algoan Index methodology

The statistics presented in the Algoan Index are based on anonymized data from French credit underwriters who use the Credit Decisioning technologies developed by Algoan. The data used comes from the 3 months of banking history preceding the credit application - so-called "Open Banking" data, shared by credit underwriters at the time of their application.

These non-reporting data are collected automatically and directly from account-holding banks. The statistics cover the period from March 2020 to April 2021. The March and April 2020 cohorts aggregate banking information for the months preceding the COVID-19 crisis in France (December 2019 to March 2020). This is therefore an "unstressed" cohort. Conversely, subsequent cohorts incorporate economic stress elements linked to the aforementioned crisis.

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