PayPod Podcast: How Alternative Data Transforms Credit Risk – with John Gordon

In a recent episode of PayPod: The Payments and Fintech Podcast, John Gordon, CEO of ValidiFI, sat down to discuss one of the most pressing challenges in financial services today: how to fairly and accurately assess credit risk in a world where traditional credit scores often fall short.

You can watch the full episode here:

https://youtu.be/LWK2OSS0hLU

Why Credit Scores Are No Longer Enough

As John shares in the episode, the credit landscape is rapidly evolving. With millions of consumers left out or misrepresented by traditional credit scoring models, financial institutions are turning to alternative data—like ACH history, bank account behavior, and fraud signals—to close the gap.

“Credit scores give you one piece of the puzzle,” John explains, “but they often miss the full financial picture. With alternative data, lenders can gain a much clearer, real-time view of someone’s ability and willingness to repay.”

Discussion topics from the Episode include:

• How ACH validation and fraud detection are reshaping underwriting. Fraud risk is increasingly sophisticated—new data tools are helping lenders catch red flags earlier and with more accuracy.
• The power of bank account behavior as a risk indicator. Account activity reveals spending habits, income consistency, and overall financial health—making it a rich source for evaluating creditworthiness.
• Serving the underserved. Alternative data opens the door for financial inclusion by giving non-prime and thin-file consumers access to products they may have been unfairly denied before.
• Why Buy Now, Pay Later (BNPL) is challenging traditional credit bureaus. John touches on how many BNPL users are invisible to bureaus, and how alternative data fills this blind spot.
• What’s next for fintech regulation and data consortiums. As the use of alternative data grows, so does the need for standardized, responsible practices across the ecosystem.