Risk analytics and digital lending: Understanding the link
Data may not be the first thing to spring to mind when you think about digital lending. There's a good chance you imagine creating online portals that allow for strong user experiences, developing an app for mobile interactions or creating policies and procedures that ensure regulatory compliance while moving lending processes online. Those issues are prevalent parts of the shift to a digital lending experience, but banks that underestimate the role of data can limit the value potential of any online lending strategy.
In practice, risk analytics software often ends up as an essential cog in a digital lending program because it allows for the automation necessary to create positive customer experiences.
Using data for online lending
"Banks can't afford to follow slow, arduous and manual processes to make every loan decision."
Customer expectations have changed with the rise of digital services, and banks can't afford to follow slow, arduous and manual processes to make every loan decision. Instead, firms must evaluate risk and pursue origination in the fastest way possible, all while complying with the regulations in place for the industry and from organizational policies. If you have to send each loan application through a long trail of workers making decisions, the ability to apply online won't make much of a difference for the customer experience.
Instead, banks need systems that can automatically identify relevant data pertaining to a loan application, analyze that information based on a set of rules and advise human employees on what action to take. From there, your workers can look at the data presented by the software and make a decision more quickly with fewer manual processes and less tedious research along the way.
Risk analytics software is essential in this process. The technology can be used to:
- Pull data from diverse sources – both internal databases and external information that may be classified as non-traditional.
- Be configured to automatically rule out certain data or sources based on policies you create.
- Apply algorithms and decisioning engine tools to data sets to determine risk associated with a loan.
- Report on details so end users can make decisions quickly and efficiently.
These capabilities make risk analytics software essential in any digital lending program. However, some organizations will try to build their own platforms to gather data from internal databases, a technological project that vastly slows the move to digital lending.
Accelerating digital lending adoption with risk analytics
A risk analytics software system can deliver the big data functionality you need, tailored to your specific operational climate. Modular platforms, such as our offering at GDS Link, let you mix and match tools based on your needs. What's more, we use strategic partnerships to gather data from a variety of sources, adding value to the analytics processes by incorporating a wider range of data sets into the decisioning process.
While customer-facing apps and services may seem like the most urgent elements of an online program, you can't create positive customer experiences without the back end systems that help you make decisions quickly. This is where risk analytics software comes into play, and where we can help your bank launch a digital lending initiative successfully.