Telecom Data in Lending: A Transformative Force for Financial Inclusion

India’s digital lending revolution is unfolding rapidly. Powered by API-driven frameworks, AI-led underwriting, and an expanding fintech ecosystem, financial institutions today have unmatched opportunities to broaden credit access.

Yet, for all its progress, traditional underwriting continues to fall short in evaluating borrowers without a formal credit history. This gap calls for new forms of risk intelligence. Telecom data, drawn from mobile usage patterns, is emerging as a compelling foundation to reimagine credit assessment for India’s huge underbanked population.

Accessing the invisible: rethinking risk for first-time borrowers

Even as credit bureau coverage expands, over 450 million Indians remain outside its scope, lacking a credit score or formal borrowing record. These “thin-file” borrowers are not financially inactive; they are simply undocumented within conventional systems.

Banks often hesitate to lend to this segment due to perceived risk. However, by incorporating alternate data such as UPI transactions and utility bill payments, financial institutions can close the information gap.

Although, among all alternative signals, mobile data stands out in its consistency and penetration. From tier-1 cities to remote towns, mobile connectivity is nearly universal — growing from 25 crore connections in 2014 to over 96 crore in 2024.

Telecom insights: building smarter, inclusive credit models

Telecom data can provide financial institutions with rich behavioural cues that traditional models overlook. Recharge frequency, postpaid bill repayment, call and SMS activity, and data usage trends can provide a dynamic overview of financial habits.

The aforementioned indicators, when analysed through AI and machine learning models, can help financial institutions deduce traits such as reliability, income stability, and credit intent.

For instance, consistent mobile recharge cycles can indicate regular cash flows. On-time bill payments reflect financial discipline. High data usage may signal a digitally literate individual engaged in online transactions or platform-based work.

Towards responsible innovation: aligning with consent-driven data sharing

As the ecosystem evolves, compliance is becoming a strategic enabler. The Digital Personal Data Protection (DPDP) Act, 2025, has introduced clear guardrails for how personal data, including telecom information, must be handled — with explicit, verifiable consent at the core of all data processing.

For financial institutions, this means any use of telecom data must now align with the consent standards defined by the law. This is where the Account Aggregator (AA) and Consent Manager frameworks become vital.

Built on secure APIs and interoperable protocols, the AA ecosystem has already facilitated over 140 million consent-based data sharing requests. It ensures that individuals can share their financial data in a safe, transparent, and accountable manner.

Moreover, Consent Managers, as envisioned under the DPDP framework, will serve as neutral intermediaries allowing users to manage, review, and withdraw consent.

The synergy between telecom intelligence and regulated consent infrastructure presents a future-ready model: one that enables innovation, empowers borrowers, and protects their rights. In India’s rapidly digitising economy, this convergence could become the cornerstone of inclusive and intelligent credit.