Trended data capabilities can be powerful tools to better predict credit risk, writes Will North.
As a global information solutions provider, we’re proud at TransUnion to leverage our global knowledge and insights to benefit the UK market, so we’re delighted to have announced the launch of TrueVision – a suite of trended data capabilities which can fundamentally transform the way finance providers understand and evaluate their customers.
With the power of TrueVision’s trended data, financial institutions can leverage new consumer insights previously unavailable from traditional credit data alone, to optimise growth and better serve consumers.
Lenders have been looking for improved consumer insights to drive profitable growth and refine their risk management strategies.
With over 2,000 data attributes and proprietary TrueVision algorithms, incredibly powerful insights emerge to help lenders achieve these results by truly understanding the story behind the consumer’s score.
A moving picture Rather than looking at a single snapshot in time of a consumer’s financial standing, TrueVision incorporates up to 72 months of account history – along with actual payment amounts – to provide additional insights into consumer behaviours, looking at payments, balance trends and spending patterns. By creating a more complete view of a borrower’s financial status, TrueVision revolutionises how lenders offer credit to UK consumers and provides consumers with more opportunities.
In this sense, TrueVision is the difference between a snapshot and a moving picture. Where a snapshot only lets you know where a consumer is currently, a moving picture provides insight into where a consumer is heading.
Tried and tested
TrueVision is the evolution of TransUnion’s proven trended data strategy, expanding on the model known as CreditVision in many other markets, which has already seen success in countries including the United States, Canada, India, Colombia, Hong Kong and South Africa. In India, our risk score showed a 28 percent increase in approval rate at the same risk when using trended data, and in Canada 27 percent more consumers have been scored as super prime using this approach.
In the UK, the potential benefits seem equally impressive, with our pilot studies showing an uplift of up to 15 percentage points against traditional credit scores, measured by the widely-used Gini index, as well as a significant uplift in performance on over 200 lender portfolios. We’re already working with a number of the leading banks, alongside a range of UK lenders, and have seen a really positive response.
Success stories of businesses using TransUnion’s trended data include a major car finance provider that needed to grow stagnating originations, but could not increase their overall risk profile. Using trended credit insights, they were able to approve many of the applicants they had been turning down – without raising risk levels – and their approval rates for consumers classified as near prime tripled.
At the same time, trended data supports financial inclusion by ensuring consumers are being fully and fairly assessed by lenders. In the US for example, TransUnion’s trended data has meant that 26 million previously unscoreable consumers can now be scored, and upwards of 23 million more consumers are now considered super prime.
Lenders can easily incorporate TrueVision’s trended data and scores into their decisioning model for faster, automatic decision-making. By ensuring that consumers are getting offers that are most relevant to them, at the best possible terms, and that lenders have a comprehensive picture to base their assessment on, the process becomes much smoother and improves overall experience.
Given the importance of customer experience today – with our recent research revealing that 79 percent of consumers said they would use or consider using a company again if their customer experience was positive – businesses should not underestimate the impact of the customer journey on their bottom line.
Our aim is to provide businesses with the tools and insights they need to ensure their customers have the best possible experience and we’re really looking forward to seeing the impact of TrueVision here in the UK, as more and more businesses start to benefit from the enhanced insights available.
Find out more about TrueVision here.