Assessing the credit-worthiness of borrowers is a key component of lending success. Accuracy and time are of the essence when assessing counterparty risk. Yet the process of assimilating and analysing borrower information in order to assign a credit score when done manually is still prone to errors. It is also time-consuming, taking days or even weeks to perform the financial spreading and risk grading of the loan applicant.
In view of the steadily growing momentum of digital transformation, the use of technology has great potential in the financial segment. There is a growing need for automated solutions that can streamline the credit assessment process and scale loan application processing volumes while enhancing the accuracy of lending decisions.
Especially in the credit sector which is otherwise characterised by complex manual processes or cumbersome legacy systems, the targeted integration of state-of-the-art technologies allows NBFCs or fintech to reap huge benefits. It enables organisations to significantly improve their efficiency, provide greater customer experience and hold ground in a fiercely competitive market.
Intelligence 2.0 – Using Technology in Credit Evaluation Process
Technology can be implemented in several ways in the credit process to make it more agile and efficient. From legitimising a new customer who applies for credit to evaluating the credit-worthiness and optimising the entire credit check process, the scope of smart technologies is immense.
Finezza’s unique credit evaluation system leverages the power of technology to analyse the applicant’s credit-worthiness with a multi-pronged approach than just primarily focusing on the credit score.
Here’s how you can make your credit evaluation process smarter with Finezza:
1. KYC Verification Made Easy
The first step to verify the identity of the customers before the actual credit process is to ‘know your customer’. This is by and large a regulatory requirement at several institutions. To meet this requirement, Finezza’s AI-enabled KYC framework can be put to use.
This smart framework can facilitate you to assimilate data from multiple sources to come up with a precise picture of the customer’s details. It makes identity checks as complete as possible by automatically checking personal data and business data from various data points.
2. Credible Credit Bureau Data Assessment
The subsequent step is to ascertain the credit-worthiness of your clients so that it drastically reduces the risk of NPAs and bad credit history. For the most part, a large number of institutions rely on the credit score derived from various credit bureaus. But is that alone good enough to assess the financial status of the applicants?
Finezza’s credit bureau data analysis engine lets you customise credit analysis based on data sourced from multiple institutions, thereby arriving at a more credible and practical index. This system leverages reports fetched from multiple credit bureaus and visualises all information in a single platform.
3. Digital Footprint Tracking to Predict Credit Behaviour
There can be cases where certain borrowers have a negligible credit history and credit scores cannot be solely used as a medium to assess credit behaviour. Also, it becomes imperative to gain a 360-degree view of the applicant to determine their authenticity. This is where digital footprint analysis can come in handy to study the Internet usage pattern of the individual and predicting their credit behaviour.
The usage of such advanced data includes the individual’s social media activity, browsing behaviour and other smartphone data. This can be combined with the traditional credit scoring model and help fintech companies to understand the customer’s credit risk level more accurately. With the use of Finezza’s digital footprint tracking methodology, the diverse data sets will serve as an alternate medium to derive relevant insights to make credit evaluation as precise as possible.
4. Geo Location Tagging for Additional Identification
When it comes to online loans, it is critical to capture the location information of your customers and tie it to the entire credit rating process. Geo-location tagging automatically captures the customer’s location and can serve as an alternate data point to learn more about the potential borrowers’ honesty and reliability.
This will then help to geo-identify each customer thereby reducing risks when working with online credit loans. Any suspicious or spurious activities can rightly be identified to prevent fraudulent practices.
5. Bank Statement Analytics for Real-time Evaluation
Finezza’s SaaS solution helps lenders analyse bank statements in real-time to streamline fraud detection checks and also assess the pattern of transactions of the borrower. If there are any red-flags or fluctuations, the system identifies and classifies all the transactions.
The data and analysis of the bank statement will help to create a comprehensive view and projection of the business or individual and also about the ability of the customer to make timely payments.
6. GST Analytics for SMEs and Businesses
Finezza’s platform also provides the data perspectives based on the GSTN tax filings of the business. This insight can be utilised to account for cash flow based lending if necessary apart from the recipient’s personal cash flows as well.
GST Analytics can serve as a great assessment if a loan applicant is providing credible information by comparing all data and also help to comprehend the financial health of the business. Is the business faring well and making payments to suppliers on time and maintaining proper accounts of the business? These are some useful information that can be used to eliminate prospective defaulters and lower loan default rates.
7. Access to Important Evaluation Metrics for Customised Assessment
Each borrower’s need and profile is different. Therefore, it makes sense to choose the evaluation metrics according to the individual profile of the borrower. This will give an upper hand to your institution to make a fair judgement of the borrowers’ credit-worthiness with a faster turnaround time as well.
Finezza’s intuitive credit evaluation system enables you to choose the data you want to account and factor in so that you can evaluate the credit risk on your own terms. For instance, the solution’s responsive interface helps you choose the credit bureau you want to include and view all aspects of the loan.
As a result, based on the data and criteria used, lenders can create their own customised loan eligibility calculator to facilitate the right credit decisions for the business.
Finezza’s smart credit evaluation platform is built to evaluate several aspects of behavioural and demographic factors of the borrower that can be scrutinised in a short amount of time before embarking on the final loan decision.
Technology can unlock the power of data and provide a wide-angle perspective of important evaluation metrics to assess the creditworthiness of the borrower. Finezza’s smart technology lending management system eases your pain of credit evaluation by making it reliable, efficient and convenient. To know more, get in touch with us today!