The economic situation is forcing credit fintechs to refine their risk engines in order to maintain the health of the portfolio, an objective that requires the use of technology
Using technology for data analysis is essential to identify the sectors that are riskiest for credit delivery and is an essential task for fintechs dedicated to loans in the current economic context.
The capital Drought, Rising benchmark rates and accelerating inflation are putting pressure on digital lenders, who must use technology to identify good payors to avoid a takeoff in delinquency rates.
This is how spokespersons for the fintech Finaktiva and the technology companies Nubit Consulting and Provenir agreed at the virtual event Lending in LatAm: How to maintain a healthy portfolio in a crisis scenarioorganized by iupana.
“Segment the entire action strategy to find out in which sectors, in which industries, in which growth stages it is necessary to adjust in a more restricted way the financing granting engines, the business rules, the scoring; and in which other sectors do we need to loosen up a bit,” said Pablo Santos, founder and CEO of Finaktiva, a Colombian credit company for SMEs.
The executive stressed that the economic situation does not hit everyone equally, so it is necessary to target sectors that can adapt more quickly to economic cycles.
“You have to understand in depth which economic sectors are impacted, which are neutral and which are winning at these junctures,” he added.
Onboarding and data for a healthy portfolio
Leveraging on technology allows good data collection, organization and analysis, something that must be applied urgently to maintain a healthy portfolio. This starts from the process of approaching the client, asking the right questions and without adding friction.
“You have to lend well and lend well begins with the process of onboarding very suitable. And, without a doubt, having a very mature scoring process”, noted Jorge Ospina, CEO of NubIT Consulting, a technology transformation company. “Also, real-time technology helps us make a good decision so as not to over-indebted a client,” he added.
On the credit score side, the use of alternative data helps to have more information about the applicants and adequately profile the lines of credit. In this there is an evolution: the traditional thing was to consult credit bureaus, but now the analysis of these expands the access to information.
“Today we have a huge diversity of data that is out there and when you have cloud-native technologies it is very easy to be able to recharge from all this diversity of data,” said José Vargas, executive vice president for LatAm at Provenir, a fintech company.
“We can call them alternative data, but they are additional data that you typically do not find in a risk center or that at the time of requesting the information in the credit application you want to reduce friction,” he concluded.