New Data Sources Are Creating New Challenges for Bankers
A recent conversation with a banker highlighted particular new challenges that many lenders face today. The information used in their account opening and lending processes is continuously changing, but their systems are hindering their ability to manage this change. The problem is not just about managing the technical integration to new data sources, but the downstream implications as it relates to the business policies that drive the relationships banks have with consumers.
Raw data assets, like credit data, used in lending policies goes through a series of steps before it’s consumed in a policy. This “value-generation chain” includes:
1). Normalization to remove redundancy and create common concepts across unique data sources
2). Attribution to quantify raw data into meaningful measurements
3). Modeling to exploit the predictive nature of the data
The data used by banks continues to change. Regulatory mandates, niche data products, and general improvements by vendors create a constant stream of change requests that need to be evaluated, implemented and tested within the value-generation chain. Managing the multitude of data providers used by a lender, and the underlying changes to the data, has become a significant enterprise risk. Changes can be misinterpreted, or not accounted for at all, causing incorrect decisions to be made at the point of interaction with customers and prospects. Having robust tools and effective business processes to help respond to this change are critical for business success. Equifax can help lenders better manage this issue.
If you want to learn more reach out to your Equifax representative or send us an e-mail.
This post was contributed by: Lee Grice.
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