Go to contents page
Why my optimism? For the first time ever, the back office systems that lenders have been intro- ducing are going to make it much, much, more difficult to get a claim to stick. We all know how assisted decisioning APIs – the Open Banking-based plat- forms that automate much of a lender’s underwriting process – have improved the application process. There can’t be many who are still unaware of how they ensure rapid, optimal outcomes for both the lender and the borrower. Plat- forms such as LendingMetrics’ Auto Decision Platform (ADP) have been quietly working in the background for some years now, generating the right decisions from both the consumer and credit risk perspective. There will not be as many, however, who are aware that the technology has a welcome extra benefit. It means lenders no longer have to rely on patchy
due diligence documentation – often amounting only to a disparate mix of paper proofs – when trying to defend mis-selling claims. They now have a robust decision-mak- ing process, not susceptible to human error, that generates a digital audit trail able to stand up to the most intense scrutiny. All of the data elements that go towards making every decision are stored and an audit is kept of how they are used. The lender has a lending policy that is signed off by their compliance team and it is diligently enforced by technol- ogy. Compare this to the past where its implementation was to some extent based upon the subjective interpreta- tion of the underwriters. The decision making is 100% consistent and backed- up by a digital footprint. Going forward, if a mis-selling claim is made, a lender has a watertight justi- fication for its decision to present to a regulator.
Furthermore, claims chasing compa- nies have a known ruthlessness for targeting those lenders that they think have weaker systems. Utilising assist- ed underwriting technology is going to act like installing a burglar alarm on a house. Why target that house when next door is alarm free? Predictably, we are going to see chasers going for those lenders who are deemed to be the most susceptible. Those who are wedded to their analogue underwrit- ing regime. But for those with the assisted deci- sioning in place, they now have what could even be seen as a silver bullet. There will still be the historic cases made under their old-style decisioning that remain more vulnerable to claims, but that number will dwindle over time. Going forward, they can at last allow themselves the thought that the clouds of claims chasing are finally parting.
www.lendingmetrics.com
Metrics Monthly | 11
Made with FlippingBook - professional solution for displaying marketing and sales documents online