Building the Bigger Picture: Put Alternative Data to Work through Actionable Steps Moving from a 1D or even 2D data view to a full three- dimensional vision of your customers can seem daunting, but it doesn’t have to be. Use the actionable steps below to get started: 1. Proof-of-Concept
Define the customers and credit decisions that you want to predict. Are you focused on unbanked customers, small businesses looking for short-term loans or young consumers with minimal credit history? Think about your goals – are you trying to predict which customers will pay their loans on time or are you trying to price loans to be more competitive? Use this information to develop a proof-of-concept project. 2. Develop Your Risk Models + Identify Data Partners Once you have your project, you’ll need to pin down your credit risk strategy and identify data partners. Depending on your business approach, you may either source the model or the data first! Whether you’re building your model internally or using a third-party, you’ll need to source the data to support it by either contracting through multiple data partners or through a data marketplace.
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