There are two types of business reactions when it comes to prepping for economic uncertainty:
- What can we do to minimize losses?
- How can we continue to attract new—creditworthy—customers?
With an 8.5% increase in subprime car loan defaults in March, it’s no surprise that loan management is top of mind, but portfolio optimization doesn’t have to come at the expense of increased customer acquisition. The right technology should support both risk management and growth goals. Lenders who switch to flexible SaaS solutions can achieve a 60% reduction in bad rate and a 25% increase in underwriting speed – so they can approve more new customers, faster.
How? They use a holistic approach to risk decisioning by accessing, analyzing, and actioning data through one solution to automate and auto-optimize decisioning performance. The result: they see a broader view of their consumers AND their decisioning gets smarter with each decision it makes.
Making the right risk decisions at onboarding and beyond
Technology is at the heart of customer-winning, automated lending experiences. It’s the superpower your risk teams need to ensure business continuity through all economic trends, including recessions. But technology is often the biggest challenge when it comes to innovating risk strategies. To recession-proof your business, choose SaaS solutions that deliver three key benefits:
- Smarter Decisions
To fully understand the fraud, identity, and credit risk for each customer you need to combine data, AI and decisioning into one unified solution. A wide variety of data provides the fuel for AI models to accurately predict risk, and with a unified approach, you have a feedback loop that empowers you to use decisioning and loan performance data to auto-optimize decisioning across the customer lifecycle. Think more accurate default predictions, smarter pre-collections decisions, and lower fraud rates—all which help mitigate the effects of a recession.
- Real-Time Personalized Experiences
In times of lower demand, you need to stand out among your competitors. This means offering the best products for your customers’ needs and industry-leading consumer experiences. Simplified applications and real-time decisioning are now a must have not nice to have. To convert prospects, you also need to have the most competitive offer. Technology that supports personalized pricing over bucket pricing strategies will help drive customer growth, especially when consumers are price sensitive.
With the economy in flux, risk teams need to be equipped to change strategies rapidly and with little warning. Yet, 74% of risk teams report data access and 39% of teams list risk model deployment as key challenges. When you need to make changes, you need to do it in real-time—no reliance on vendors and no waiting on IT. Instead look for business-user friendly technology with a no-code, drag and drop UI to ensure you can implement changes exactly when you need to. Did you know that a no-code UI can reduce product launch times from months to weeks?
While economic uncertainty will always be a business stressor, having flexible SaaS solutions to support your business will empower you to take control of how you respond to market changes.
Download the Provenir eBook to discover how technology can manage risk in adverse markets and continue to attract new customers.