How lenders can improve their credit decisioning

TL;DR

·  Render is a credit technology company focused onbringing open banking affordability models into credit decisioning.

·  As the lending market is becoming more competitive, and the economic climate unstable, lenders need to have thought on readapting their processes.

·  Built out of a real lending business, Render has 3 key offerings to help lenders get a better understanding of their borrowers, automate their decision process and effectively improve their score card.

·  The affordability API, reconciling credit bureau and open banking data into actionable lending insights. The no-code credit decision platform automating credit decisions leveraging various data types. And the underwriting CRM to streamline referral cases in a timely and efficient manner.

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Lenders face an increasingly competitive and turbulent market. Given the current economic climate, many are finding it hard to maintain, and grow, their originations without increasing their own risk. Which internal processes can be improved? Should we build these in house or source externally? Is it even possible to originate more loans without impacting credit performance? At Render, we’ve built a full set of tool to help our customers truly understand their borrowers, and tackle these challenges. By generating best-in class affordability models, and automation tools; we help lenders transition towards the future of lending – one that looks at the full picture rather than just relying on credit scores.

Accept more clients. Make faster decisions. Reduce your risk

While the lending industry has traditionally opted for a measured and conservative approach, there’s no doubt that the current economic uncertainty will push the last of the Mohicans to at least rethink their processes.

The average consumer’s financial picture is changing. People’s career paths may include a full time job, some contract work on the side, or simply just a variety of “side” gigs. In fact, 1 in 6 adults in the UK currently work in a gig job at least once a week.

In addition, consumers are also diversifying their liabilities. 50% of consumers have now used buy now pay later services (BNPL) and 39% of those who have never used it say they're at least somewhat likely to use it within the next six months. Beyond this particular type of credit, borrower shave more lending options than ever, ranging from personal loans to auto and mortgage debt.

Hence, to better understand your consumer’s complete financial picture, you need visibility into their entire credit portfolio from credit card debt to household liabilities. Without the right tooling and expertise, making sense of this data can be a nightmare.

This is why we’ve developed our affordability API. Our solution identifies income, expenses, assets and financial behaviours to help you make better credit decisions. Coupled with CRA data, our affordability API enables you to serve thin-file or hidden prime customers while lending more responsibly by allowing you to identify previous invisible risk factors, like gambling.

Monitor your risk while offering competitive loans

With house prices expected to fall, rates to rise, and unemployment likely to follow, the risk of borrowers defaulting is growing. Lenders will need to rely on richer data to manage their underwriting risk. Given the huge amount of data that’s now available, it’s hard to argue that using it to make a more holistic assessment of each applicant makes more sense than ever before. While having the data and using it effectively are two distinct challenges, our platform can help overcome both.

Our underwriting tools and affordability API you can look at a borrower’s full and real-time financial picture and instantly put the most relevant information in the hands of your underwriters. This gives them everything they need to make quick and accurate decisions.

Reduce regulatory and fraud risk, while increasing operational efficiency through automation

Consumers expect a frictionless application process and a fast decision. Data privacy and security are equally important. We understand the importance of all of this as well as the value of decreasing fraud in your underwriting process. Our underwriting tool allows you to quickly verify each borrower’s identity, and flag potential fraud to your underwriters. Finally, as the FCA’s new Consumer Duty outlines, and in light of the current recession, lenders will be under increased regulatory scrutiny to make sure they acting in the best interests of each customer.

Automation and AI can significantly reduce the time it takes loan officers to make compliant documents. Research has shown that leveraging AI in the lending space can save as much as $70 billion annually. This is why we are convinced at Render that there is a necessity for financial institutions to welcome it.

It’s the perfect time to review your origination process, create clear digital transformation goals and implement technologies that can speed up your decision cycle and drive down costs. Thinking about what you are positioned to do exceptionally well in-house and finding or expanding partnerships to help automate elsewhere could be the key to implementing time-saving and best-in-class operations. We’re here to help.

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Learn more about Render’s lending solutions.