Within the last few years, we've seen many financial institutions rely heavily on traditional data as they've been making various credit decisions. Recent tumultuous times have also caused businesses and consumers to lose valuable revenue. Meanwhile, existing data models that were originally intended for periodic declines (instead of a complete economic standstill) have proven not to be as relevant or foretelling. These dramatic changes in both credit and consumer behavior have caused lenders to seek new data and earlier warning signs. This is where analytics come in.
The Quest For New Data
The recent explosion in data can offer added efficiency at a quicker pace, skipping past the lag that often accompanies more traditional signals. In addition, this new data has piqued the interest of financial institutions in discovering new consumers and cultivating financial inclusion. Many adults around the world don't even have credit, and therefore, have no records. As a lender, your credit union (CU) must take advantage of this market of individuals with developing credit infrastructures.
You can increase the accuracy and speed of your lending using data. Although the majority of lenders already have access to this type of data, it's usually not used to its fullest potential. This data can produce a variety of predictive aspects that are based on the value, frequency, and number of transactions from specific retailers.
The Value of Analytics
Analytics has a timeliness aspect to it, which allows it to show financial health in real time. Practically speaking, it's also become much easier to manage and utilize in order to gain valuable insights. This is due to significant technological advancements in data organization and processing as well as the development of AI and machine learning.
Another benefit of analytics is that it's available and easily accessible. Credit unions already house this type of member data and are able to access new individuals through open banking. When lenders can analyze transaction flows like frequency, level, and volatility, they are able to record risk and performance.
Finally, analytics satisfy the regulatory standards of all markets, which means your credit union can use them at more than one touchpoint. Whether you're engaged in member onboarding, deciding on a credit limit extension, or detecting fraudulent activity on someone's account, you can use analytics to your advantage.
Use Analytics and Gain Greater Lending Returns
With readily available, easily accessible, real-time analytics, you can make better decisions for your credit union. Using analytics can help your CU experience faster, more accurate lending, which benefits your members and your bottom line.
If you're interested in learning more about our Savvy Money integration, we recommend downloading our eGuide.
