The Fintech Times - Edition 31

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COMPOUND DATA: THE KEY TO ACCESSING ‘DATA-DRIVEN OIL’ Laying the pipes to the best insight will empower financiers to meet their customers’ needs in minutes not months


hen discussing business financing one phrase is heard above all others: ‘data is the new oil’. That has been the key takeaway from panels, conferences and articles for the past few years. To the tune of $5trillion globally and growing at a rate of 19 per cent compound annual growth rate (CAGR) from 2019 to 2025 in the United States alone. What’s less covered is how to get access to that oil. A typical banker is tasked to grow their book of business 10 per cent in an economy that grows an average of one to three per cent annually and where loan rejections are high: 72 per cent in small and medium-sized businesses (SMB) and 40 per cent in commercial. It’s a head-scratcher. With all the numbers tossed around, it’s easy to forget that each loan represents a business with a personal story. As a commercial banker, Boss Insights’ CEO Keren Moynihan experienced this daily, saying: “At times businesses faced cash-flow challenges and I remember one orthodontic practice specifically. Providing support required a deep understanding of the business and the bank. The industry simply doesn’t allow for this type of deep dive anymore. Even then, it happened only if the client was willing to share, the banker cared to understand and the credit department was cooperative. That’s a

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lot of variables to rely on to ensure customer delight, a main goal of financial institutions at the moment.” In today’s market, banks, credit unions and alternative lenders are held to challenging regulatory standards and high customer expectations thanks to the advances of big tech players, such as Amazon, Instagram and LinkedIn. They’re expected to offer a complete offering and personalised service at the same time. That’s a tall order. On top of that, the cost of loan underwriting is expensive and because the revenue is a percentage of the loan amount, it’s more lucrative to run larger commercial, rather than SMB departments. The oil people are talking about gets more elusive each year. In reality, it’s not the data, but insights that are the oil. The more data sources the better the insights. At industry events, many lenders purport financial information and at times payment information to be a complete 360-degree understanding of a business. Financial information is very important, however it does

not provide a complete picture of the borrower. At best it’s a 360-degree view of the financials. It leaves the lender in the dark on management, operations, support, sales and analytics. A true 360-degree view of the business looks at all of these areas and provides insights on them. It’s the key to getting access to that elusive oil. The orthodontist is one of millions of businesses and, in his case, the integration to customer relationship management software would have demonstrated that after a seasonal lull, patients

were booked for six months, supporting a short-term increase in an operational loan. Without it, the lender has no view into this information unless the relationship manager has developed a particularly strong connection. With the pace of the market, it’s not realistic to assume that a relationship manager would have the bandwidth to do so and the result would be that the facility would not be offered, even though it meets the risk metrics. More importantly, the borrower would experience frustration instead of delight.









The reasons to understand more about a customer are endless but to summarise a few: Quick decisioning in SMB and commercial loans ● Creating business delight by proactively meeting businesses’ needs in deposits, cash management, treasury, foreign exchange and employee benefits ● Providing businesses with insights on their own company ●

The conventional oil is aiming to grow a book 10 per cent every year. That target is only met some of the time. With compound data, lenders create customer delight while growing their books. In short, lenders and the businesses they support get access to the oil. Financial institutions have historically devoted resources to creating single not compound data sets. With a limited understanding of the business comes a limited understanding of the customer and their needs. Compound data empowers lenders with insights so they can empower

In an era where tech giants have increased the expectations on the consumer front, lenders and private capital providers are challenged to offer complete and personalised solutions. Boss Insights’ Compound Data Platform provides a real-time understanding of the business client to lenders, enabling them to offer customer delight while accelerating capital from months to minutes and proactively offering ancillary services. Our mission is to enable businesses to be measured on their merit as opposed to their collateral or personal credit. Website: www. LinkedIn: www.linkedin. com/company/ bossinsights Twitter: @bossinsight

borrowers. In the race towards the best artificial intelligence and best understanding of the borrower, compound data provides a key strategic advantage – enabling customer delight.