Three things lenders need to do to navigate today’s complex lending and credit landscape

COSTA MESA, Calif .– (COMMERCIAL THREAD) – As we enter the final stages of the pandemic, many countries are experiencing a two-track economy. Some people currently have more money than they had at the start of the pandemic and are now ready to spend. Yet a significant part of the financial fallout of 2020 still ripples through their lives.

According to The Experian eBook released today: Navigating a New Era of Credit Risk Decision Making, one in three consumers remains concerned about their finances. However, research also found that consumers are no longer cutting back on discretionary spending as much as they were six months ago, with higher income homes starting to spend the most.

It is increasingly important for lenders to understand customers and individual segments in order to make the most relevant decisions and offers during this unprecedented time. The report identifies three things lenders need to do to navigate the complexities of today’s lending and credit landscape:

  1. Leverage advanced data and analytics – to create a global understanding of the risks and opportunities of their portfolio as well as visibility on the evolution of customer profiles.
  2. Proactively engage customers – offer new credits and other products to support those who are recovered and ready to commit.
  3. Prepare for a possible wave of delinquency As the payment holidays come to an end, lenders should make it easier for customers who are still struggling. Lenders should offer online assistance and flexible terms that help clients to solve their problems.

“Consumers experienced the financial impacts of the pandemic differently, depending on their industry and income level, which has led to very different credit needs,” said Donna DePasquale, executive vice president of Global Decisioning at Experian. “Lenders need to understand more than ever who their customers are and provide them with the right solutions at the right time. ”

The report also takes an in-depth look at the role that data, analytics and advanced decision-making play in today’s digital world. The data entries generated by the pandemic have had an unexpected impact on credit risk models and machine learning applications, in some cases due to widespread payment holidays and government assistance. The study finds that companies’ confidence in their current models of credit risk analysis and management, from companies of all sizes, has increased from 71% to 61% in six months. This prompts nearly half of companies to devote resources to improving their analytics. Investments in analytics, such as machine learning solutions, allow companies to quickly use non-traditional data sets, explain what the data reveals, and test new models of credit risk and credit risk. forecast.

“Forward-looking businesses will need to go beyond traditional data sources and leverage deep data to anticipate their customers’ credit needs while using tools to automate the process and reduce risk,” said added DePasquale. “The future of credit risk decision making means asking less of your customers without sacrificing relevant, secure and convenient experiences. ”

Experian surveyed nearly 9,000 consumers and 2,700 businesses around the world to find out more about how they’re stabilizing their finances and getting back to growth. Navigating a New Era of Credit Risk Decision Making may be downloaded here.

About Experian

Experian is the world leader in global information services. During life’s greatest moments – from buying a house or a car to sending a kid off to college to growing a business by connecting with new customers – we make it possible for consumers and our customers to manage their data with confidence. We help individuals take financial control and access financial services, businesses make smarter decisions and prosper, lenders lend more responsibly, and organizations prevent fraud and identity crime.

We employ 17,800 people in 44 countries and invest every day in new technology, talent and innovation to help all of our clients maximize every opportunity. We are listed on the London Stock Exchange (EXPN) and are part of the FTSE 100 index.

Learn more about or visit our global content center visit global news blog for the latest news and ideas from the Group.

Experian and the Experian marks used herein are trademarks or registered trademarks of Experian and its affiliates. Other product and company names mentioned in this document are the property of their respective owners.

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