Give Me Some Credit: Growing Your Business Using Alternative Data
Alternative data has the power to assist in achieving growth and expanding your business. How? It empowers you to gain a deeper understanding of potential and existing customers. Using the right types of alternative data allows for a more comprehensive and accurate credit risk picture. Think of this as building out your three- dimensional view of a person…you may currently rely on traditional methods to create a 1D view of someone, and while this can be a solid indicator of credit risk there is often much more to see, especially if no traditional credit score is available. So, how can you use alternative data to drive business growth? 1. Say yes more One area ripe to benefit from the use of alternative data is decisioning for credit invisible, thin-filed, or underbanked consumers. Often a decisioning challenge for lenders, this group includes minorities, immigrants and younger consumers seeking an opportunity to obtain credit but lacking traditional credit scores or a credit history. Alternative data becomes an entry into financial services and brings them into the lending ecosystem. Small businesses are also another customer to consider. SMEs can find accessing credit difficult – paperwork requirements and background checks can be tedious and time-consuming, meaning they don’t get access to funds
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