Credit analysis system bared
Chicago-based TransUnion, which specializes in consumer credit reporting, on Tuesday announced using an algorithm it claimed has changed the way financial institutions understand, manage and evaluate credit card clients.
A more complete picture of a customer’s total debt obligation and payment behavior is key to getting an early indication of risk profile changes and being able to make the best decisions in this rapidly evolving crisis.
Called CreditVision, the system of computing ostensibly provides a more detailed and accurate picture of a consumer’s financial behavior over a period of time compared to traditional scoring models.
By analyzing up to 24 months of financial information, versus the conventional approach of looking at data at a single point in time, CreditVision provides a deeper understanding of the consumer’s current and likely future financial situation, enabling more accurate lending decisions.
TransUnion said the algorithm allows lenders to offer loans to millions of new customers and new-tocredit individuals in global markets and transform lending in the Philippines where it is unique as the only trended data product available in the market.
This develops at an important time as the pandemic induced economic downturn is causing rapid shifts in consumer financial situations and changes in consumer actions.
The system builds on TransUnion Philippines’ database of 24 million account points that features a more insightful, holistic view into consumer behavior. The trended data solution gives businesses the clarity and assurance needed to lend, predict risk, and continue to support consumers during uncertain economic times. More reliable and highly predictive trended usage and payment data becomes even more valuable when recent signs of consumer financial stress are invisible to lenders; now often the case under COVID-19.
“It is crucial for the finance industry to be proactively identifying both risks and opportunities early on to mitigate credit losses and strengthen customer relationships during these trying times. CreditVision provides a more stable view of which consumers represent good credit risk, positioning it to drive strong consumer and business benefits as the country navigates challenging economic conditions.
“It also helps those who were previously under the radar be considered as the additional variables and attributes now in play help lenders understand shifts or patterns in the consumer’s behavior, which will enable lenders to offer the right products,” said TransUnion Philippines president and CEO Pia Arellano.
A more complete picture of a customer’s total debt obligation and payment behavior is key to getting an early indication of risk profile changes and being able to make the best decisions in this rapidly evolving crisis. TransUnion’s technology-assisted solutions are specifically crafted to strengthen capacities in order to help effect positive outcomes within the business community and the local economy as a whole.