4 Ways For Receivables Finance Lenders To Leverage Data

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4 Ways For Receivables Finance Lenders To Leverage Data

Thursday, March 24, 2022

As lenders recalibrate and look to 2022 and beyond, harnessing their data's power will be key to fostering significant growth and gaining a competitive advantage in the market. Lenders are faced with more diverse and extensive datasets than ever before and below we outline four helpful tips for getting the most out of your data.

1. Data Extraction 

Data extraction provides lenders with two main advantages: making faster decisions for new loans and saving time with existing customers. When reviewing a new prospect, the use of data extraction allows lenders to view the prospective client as if they are an existing customer. Secondly, data extraction used with existing customers removes the need for several manual, outdated processes. This improved efficiency reduces the time it takes for clients to access funding and is what ultimately gives you a competitive advantage in the market.

2. KYC And Audit Data

This year, lenders will be eager to resume in-person risk assessments. While a certain amount can be checked remotely, face-to-face meetings can provide insight on how organized a client business is, its quality of systems, and the people's ability to run the business.

It will be key for lenders to strengthen their KYC and auditing processes to spot trends and benchmark conditions for prospective clients. 

Lenders should be asking themselves the following questions: 

  • Does your KYC function constantly adapt to the ever-changing nature of risk management?
  • Did you know that ongoing monitoring of your clients, Periodic KYC & Event Driven KYC reviews are as essential as onboarding KYC for overall risk management?
  • What is your risk appetite? Do you have an automated risk calculation based on your risk appetite that allows you to make an informed onboarding or ongoing AML monitoring decision? 

3. Automation And Decision Intelligence 

Taking a risk-based approach, coupled with the use of automation and applying Decision Intelligence (DI), allows you to quantify the risk before onboarding a new prospect. This means that lenders can benchmark potential customers, compare how they have behaved in the past, and then set the correct parameters. A new decision could be made if the prospect moves out of the benchmark. Despite some changes in behavior potentially being negative, some could end up presenting promising opportunities for lenders.

4. Helping The End Customer 

Consumer attitudes on sharing data are beginning to change, and more people are willing to share information if they are aware of the benefits. Lenders need to be transparent with their customers about how data can help them access funding quicker. Effective use of data and automation ultimately enhances the customer experience by speeding up the decision making and subsequent onboarding processes. It essentially reduces the effort clients need to make to receive funding and ensures they’re receiving the right product. 

Read Navigating 2022 And Beyond

Volume 4 of the Receivables Finance Global Outlook is now out.

Find out how technology and data can speed up and optimise risk processes to help lenders realise their 2022 growth ambitions.

READ THE FULL REPORT HERE