4. Predictive – The data should contain information that is relevant to the behavior you’re trying to predict, such as checking account data being predictive of repayment behavior. 5. Compliant – The data must comply with existing consumer credit regulations, allowing for regional differences like the Fair Credit Reporting Act, Equal Credit Opportunity Act, or the Gramm-Leach-Bliley Act How do you find and use alternative data sources? Option 1: Vendor by Vendor Work directly with a data vendor. When seeking one, it’s important to find a company that meets the criteria outlined in the five points above. A few questions can help vet potential partners: • Can you integrate the data sources within your existing system? • What is the cost of the data? • Will the alternative data set provide a good ROI? • What’s the data integration time into your system? • Which regions do you cover? • Does the data meet regulatory and compliance requirements? • How many types of data do you offer? Once you find a partner, you’ll need to complete a contract and understand the integration process. Additional questions may include what sort of technology and process changes are needed, what are the internal staffing needs and what’s the learning curve for implementation and analysis?
Made with FlippingBook Digital Publishing Software