Just how helpful are analytics to optimize indirect lending value generation and minimize risk?
Our experts recently hosted a webinar to explore the topic and provide answers. The webinar specifically focused on how analytics can show the precise factors affecting competitiveness and if the financial institution is decisioning effectively. In addition, they discussed how using enriched data versus base data goes a long way towards gaining a deeper understanding of changes that need to be made to your program if you’re looking for greater levels of success. If you missed the webinar, you can request a link to the complimentary recording by clicking the button below.
As always, our team fielded questions from attendees following the presentation. Here’s what was covered:
Q: Where does the data come from?
A: Your analytics provider should partner with one of the major bureaus for the enriched data utilized by the solution. The provider should then merge that data with your financial institution’s core and loan origination data to perform the analysis and create the final presentation with recommendations.
Q: How do most of these solutions work? Is it a real-time service or a batch? Also, is it one time?
A: As explained, it’s not a real-time analysis and is more of a batch. The extraction of core and loan origination data from the institution is then merged with the enriched bureau data. Also, the analysis can’t be performed in real time because the provider needs time to gauge and analyze performance of those loans, which usually can take a few months. As far as a one-time offering is concerned, we recommend that you avoid those types of solutions since it’s often too focused on the short-term. Ideal solutions will include a multi-year partnership where you have to option of running the analysis either twice a year or quarterly.
Q: What are the main insights we can get from this data in terms of structure of the deal?
A: As we showed during the presentation, there are several pieces of information regarding the deal that should factor into the analysis such as the interest rate applied, loan-to-value ratios calculated by the institution as well as the term, dealer and the institution that financed the loan. Using these data points, the provider will try to understand where something went wrong and what might be done to improve. So if the risk profile matches the institution’s policies, then you’ll want to see if you can offer the right combination of terms and other factors to succeed.
CRIF Achieve’s Reveal Pro solution allows financial institutions of any size to analyze their indirect lending portfolios and performance to target key areas where they can improve or outperform the competition. For more information on how this solution works and how CRIF Achieve can help your financial institution’s indirect lending program, please click the button below to request a complimentary link to our webinar recording.
Photo Credit: Alan Cleaver