The Secret to Consumer Lending Success
The world of consumer lending can be full of barriers, like variable economic conditions, evolving technology, and fierce competition. Do you have the right tools to overcome them and provide your customers with worldclass customer experience? Discover how you can unlock the secret to consumer lending success and: Say “yes” to more applications Reduce your risk of default and fraud Launch new products faster
The Lending Landscape
253.8 Million 10% 60% increase 557.7 Million over 80% $11 Billion
size of global consumer credit market
MEA’s YOY growth of total loan value of people in UK reliant on high cost short term credit credit card holders in APAC (only 13%)
US consumers with a loan balance of LatAm consumers would consider financing plans for purchases
Auto Lending
The Challenges
Prolonged application processing time
Some lenders still process auto loan applications manually, taking hours to manage masses of paperwork. Aside from rising shopper frustration, the more time you spend on processing a loan for a single customer means the less time you have to reach new ones and help your business grow.
Inconsistent decision accuracy
If you’re working with an inflexible loan origination system (LOS) or have to go through manual processes hundreds of times each day, you cannot guarantee the utmost accuracy of your decisions. If you have to change models based on market shifts, it becomes even harder to make smart decisions for each and every application.
Poor customer experience
Auto shoppers often spend more than three hours at a dealership when purchasing a vehicle, but their satisfaction begins to fall in half the time. With trust in car salespeople low to begin with, customers expect fast, personalized offers, and if they can’t get it from you, they’ll find it elsewhere.
The Opportunities
Real-time approvals
No more sifting through piles of paper - technology that enables instant approvals will help you capture customers swiftly and move more cars off the lot. Offer digital applications for both speed and convenience.
Smarter decisions and lower risk
Data-driven, flexible decisioning takes the guesswork out of approvals. Lower your risk and increase your accuracy with every decision. Respond to economic uncertainty and market variations with ease and without compromising your risk appetite.
Want to hit the gas on Auto Lending?
• Explore the power of instant approvals in the eBook, Netflixing Auto Finance
Loyal customers
Bypass the one-sizefits-all competition with personalized offers powered by AI. Customers will receive instant approvals with the terms that fit their unique needs, building loyalty and turning them into repeat customers for years to come.
• Discover how GM automated their auto loan origination with Provenir
Mortgages
The Challenges
Slow and inefficient processes
Mortgage application processes take days and even months, rather than hours, due to their highly complex nature, from pre-approval to receiving the actual loan. With so many moving parts, inefficiencies build up, slowing down the loan cycle even further.
Unpredictable economic conditions
For mortgage lenders, an unpredictable economy means your customers’ ability to make their payments on time also becomes unpredictable. If you don’t have the right tools in place, it can be a struggle to proactively manage customer accounts before default.
Limited growth opportunities
Ideally, you want to keep your risk as low as possible while reaching the highest number of potential customers. By determining creditworthiness with data from credit bureaus alone, you may never connect with qualified customers that have thin credit files, giving up a low-risk channel for growth.
The Opportunities
Speedy, simplified loan cycles
Reduce inefficiencies with a unified solution that combines data, decisioning, and AI. Connect processes and streamline each step for faster approvals, no matter the complexity.
Support your customers in any economy
When it comes to supporting at-risk customers, the most successful lenders are proactive, not reactive. Monitor their account health from the point of onboarding to intervene before the first missed payment.
Reach new customers with alternative data
With alternative data like rent and utility payments, employment and salary history, or even social media activity, you can determine the creditworthiness of credit invisibles or applicants with thin credit files. Use both traditional and alternative data to foster financial inclusion and accelerate business growth.
Ready to home in on Mortgage lending?
Check out today’s top three mortgage lending trends that will help you thrive tomorrow
Retail and Point-of-Sale
The Challenges
Abandoned shopping carts
Research shows that cart abandonment rates can reach as high as 85% on mobile, with an average of 70% abandonment across e-commerce channels. That means every second counts during checkout, and any rent-to-own or other point-of-sale retail financier risks losing customers if they cannot move fast enough.
Inability to scale and adapt
Inflexible decisioning systems can keep your business from growing, be it with additional products, locations, or partners. Without the right easyto-use technology, you cannot meet increased or changing customer demand swiftly and easily, giving your competitors the advantage.
Complicated user experiences
Seamless financing integration into a shopper’s experience is no longer a bonus; it is now an expected feature. Each additional click an applicant makes at checkout takes them further from completing the sale - exceptional retail lenders make the experience as simple as possible to avoid cart abandonment.
The Opportunities
Instant, automated decisions
Reclaim the shopping carts of the 60% of consumers who say they are likely to use POS financing over the next six to twelve months. Transform buyers into borrowers with automation that returns more accurate decisions and personalized offers to your customers in under a second.
Go to market quickly
Launch new products in record time with decisioning technology that features no-code UI, putting any business user at the helm of innovation. Scale and pivot on demand, or leverage auto-scaling for multiple product lines to help your business evolve on your own terms.
Provide one-click applications
Simplify both the frontend and backend with oneclick financing processes. Data seamlessly integrates directly into your decisioning platform for instant approvals, saving your customers from having to leave the checkout screen even once.
Shopping around for more Retail lending knowledge?
Learn how Rent-A-Center grew with instant approvals and smarter decisioning
Buy Now, Pay Later
The Challenges
Insufficient access to data
One of the most appealing features of Buy Now, Pay Later (BNPL) loans is you do not need to perform a hard credit check like other retail/POS financing options - saving you money and your customers a ding to their score. However, without expansive access to both traditional and alternative data, it can be difficult to assess creditworthiness accurately, and that puts you at risk.
Changing regulations are unpredictable
If you’re working with an inflexible loan origination system (LOS) or have to go through manual processes hundreds of times each day, you cannot guarantee the utmost accuracy of your decisions. If you have to change models based on market shifts, it becomes even harder to make smart decisions for each and every application.
Preparing for next-gen BNPL
Even though BNPL has slowed down in some regions, its adoption is still growing on the whole and transitioning along the way. The evolution of BNPL means new regulations and new channels for growth and innovation. Your decisioning platform must be ready to scale along with the increase in demand that will be propelled by the next generation of BNPL offerings.
The Opportunities Leverage
alternative data
Mitigate risk and make smarter decisions with a combination of alternative and traditional data. BNPL has been hailed as a tool for financial inclusion, and with the right data on your side, you can approve more creditworthy customers while keeping your risk low.
Unify your technology
Create a risk decisioning ecosystem with one solution for data, KYC, analytics, and insights. Implement integrated drag-and-drop processes to retrain models around new regulatory or business requirements in real-time across the entire BNPL customer lifecycle.
Future-proof your solution
Easily iterate processes and deploy changes quickly to get ahead - and stay ahead - of changing demand. Visualize data with prebuilt dashboards and use machine learning and AI for cutting-edge insights that will power innovation for BNPL 2.0, 3.0, and beyond.
Looking for BNPL insights to help you thrive now and later?
• Evolve your BNPL strategy and pivot to profitability with our guide to building a sustainable buy now, pay later offering.
• See how one BNPL provider was able to improve flexibility and make decisions 15 times faster.
Credit Cards
The Challenges
Impending defaults
With worldwide economic downturn affecting the global economy, the ability for consumers to pay their credit card bills on time may change for the worse. As an expert lender, you know to expect increased delinquencies in times like these, but only reactively handling defaults means you lose money and customers.
Increased fraud
In 2021, payment card fraud increased 14% to over $32 billion lost globally. As fraud gets more complex, it takes more complex data and decisioning solutions to be able to catch deceptive applications. Legacy decisioning technology often can’t filter out the fake applicants quickly enough, leaving you saddled with accounts nobody ever intended to pay off.
Competition with new players
BNPL has a reputation for being a less risky, more inclusive alternative to credit cards, with some going so far as to call it a “Credit Card Killer.” While in truth, credit cards and BNPL can play well together, the new entrants have highlighted that the credit card space is ripe for innovation, but it’s up to gutsy lenders like you to rise to the occasion.
The Opportunities
Proactively monitor account health
With slower economic conditions, it’s easy to predict that some customers will have trouble paying their credit card bills. Instead of waiting around to see which do and sending them to collections, use AI and machine learning for predictive insights across the entire customer lifecycle. Implement early warning signs to identify at-risk accounts and intervene before the first missed payment.
Stop fraud in its tracks
Use flexible technology that gets more accurate with every decision it makes to stop fraudsters before they infiltrate your business. With the right data at the right time that feeds into your decisioning engine, you can instantly approve qualified applicants and reject bad actors.
Boost innovation
No matter how fierce the competition, adopt technology that makes it easy to test new risk strategies, explore new data sources, and get actionable insights with data science tools. Do it all in real-time with no-code interfaces to iterate again and again without reliance on vendors.
Have more interest in gaining credit card lending expertise?
• Unlock the power of credit cards with 3 innovative trends driving the industry forward
The Secrets to Consumer Lending Success
Now that you understand the challenges and opportunities associated with auto, mortgage, retail, BNPL, and credit cards, you’re ready to unlock the secrets to consumer lending success:
A unified data and decisioning ecosystem that combines traditional and alternative data, an advanced decisioning engine, and machine learning/AI-driven insights will enable you to prevail over any challenge and seize every opportunity.
The economy can be unpredictable but your risk strategy doesn’t have to be - invest in flexible technology that anyone can control to easily respond to market changes.
If you want to engage new markets while fighting fraud, you need consistently accurate complex decisioning.
Approval speed is essential for world-class customer experience and building a loyal base of repeat customers.
These secrets will set you apart and help break down the barriers you’ll inevitably come across. But having the secrets to success is one thing –using them is another. To ensure the best results, make sure your lending foundation is in place with:
Modernization
Many LOSes and decisioning engines have yet to fully adapt to today’s digitally native, data-driven underwriting processes and sophisticated decisioning capabilities. Incorporate best-of-breed systems that can support everything from waterfall knockout rules to full machine learning models. And don’t stop at today’s technology when you can leverage a future-proof system that continually pioneers new capabilities, keeping you ahead of the competition.
Faster, more accurate decisions
Pre-developed data integrations and pre-built decisioning logic just doesn’t cut it anymore. For rapid and accurate data-driven decisioning that you can easily optimize, you need technology that doesn’t take days and external vendors to manage.
Seamless integrations
Why rely on one system to handle straight-through processing that leads to unnecessary compromises when you can have it all? Integrate data and decisioning technology seamlessly into your LOS for flexible control, smarter decisions, and scalability.
Once your foundation is built, you can access the ultimate secret to success:
The right tech will enable flawless operation and innovation,no matter the use case.
You don’t need to unlock another secret to find the right tech partner to help you thrive. You can have Provenir’s AI-Powered Decisioning platform at your side. The best data and decisioning solutions aren’t one-size-fits-all. Provenir’s technology combines the power of data, decisioning, and AI into a single low-code UI to help you make smarter risk decisions across the entire customer lifecycle.
Simplify your data supply chain with real-time access to alternative and traditional data, make more accurate decisions in an instant with flexible, drag-and-drop decisioning processes, and launch new products at record speed with AI-powered optimized business insights. The secret to consumer lending success is the secret to smarter decisioning: Provenir.
Get started today at Provenir.com