A Game Changing Increase in Predictive Power for Commercial Risk

September 26, 2017 Bob Crutchfield

As a financial institution in an ever-changing landscape with fast-moving competitors, how do you grow your card and loan portfolios and protect margins without taking on more commercial risk or slowing down the credit application process?

When both top AND bottom line growth is the goal, industry leaders focus on two top priorities:

  • Increase the approval rates on “good” accounts and
  • Reduce charge-offs from delinquent accounts

But how can you achieve these outcomes without slowing down the application process or spending a fortune to acquire new resources?

The key is an automated solution that improves your ability to predict account performance and minimizes manual reviews.  Working closely with our customers, Equifax has made significant advances in three key areas to make this a reality:

Data

  • By leveraging unique business data linked to consumer data, you can improve your credit decisioning even for small businesses without significant credit history
  • New trended business data means that instead of a snapshot of payment performance, a score can now incorporate insights derived from behavioral trends over time.  You may know a business was a good risk yesterday, but how has it evolved over time and how could that knowledge improve your credit decision?

Technology

  • NeuroDecision™ Technology is third-generation decisioning technology that goes beyond logistic regression and fusion/embedded frameworks to deliver significant improvements in predictive performance and accuracy by considering more attributes in less time

Modeling Techniques

  • In addition to better data and advanced technology, configuring a model to address your specific population can provide even more performance improvement.  A score that works well for a national card portfolio may not be optimized for targeting regional prospects.  By working with experts like Equifax, you can leverage a score tailored for you from multiple data sources, risk profiles and population characteristics. You get the performance of a custom score without the lead time to develop it!

All these elements combine in our new Commercial InsightTM Delinquency Scores to produce ground-breaking increases in predictive power of up to 20%! This enables you to expand your revenue base – by approving customers that would have been rejected and reducing charge-offs for current accounts.   You can see the results yourself!  We’ve developed a free benchmarked analysis to demonstrate how our advances in data, technology and modeling could impact your portfolio.

 

Click here to learn more about these exciting advances in predictive analytics and to get your free benchmark analysis started!

The post A Game Changing Increase in Predictive Power for Commercial Risk appeared first on Insights.

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