Global Lending Services’s Chief Executive Steve Thibodeau is rethinking the way the subprime lender decisions applications as the company ramps up its direct lending business.
“The entire decisioning framework must be turned on its head, with the purpose of first solving for the needs of the consumer,” Thibodeau told Auto Finance News.
To that end, GLS is making “significant” investments to its decisioning framework, adding sources to the decisioning capabilities and ensuring the system is flexible and fast enough to meet customers’ online needs, Thibodeau said.
Also read: Global Lending Services to venture into direct lending
Specifically, GLS has had to redesign its decisioning protocol. Dealers typically submit applications at the end of the sale process, once collateral has been selected and the price agreed upon. But the direct lending process is less straightforward. “Customers are all in different stages of the purchase process, and your decisioning system needs to be able to handle all these different situations,” Thibodeau said.
As such, Atlanta-based GLS is focused on using alternative data sources and new statistical modeling approaches to enhance its credit decisioning. In the company’s most recent score model build, data scientists analyzed 12 to 15 data sources to identify the five that provided the greatest results. “The power of these additional data sources allows us to more effectively assess risk, allowing us to offer better rates to consumers,” Thibodeau said. “The key is knowing which data sets to use and how to integrate them together with the credit data available.”
Speed is another factor the subprime lender is considering. “A customer at a dealership is willing to wait a few minutes for an answer, but online that needs to be a few seconds,” Thibodeau said.
