How the growth and risk balancing act just got easier with new information sharing rules
Your information alone is not enough to make the best decisions. Research by Veda has shown that a large proportion of the Australian credit active population has relationships with multiple lenders. Comprehensive Credit Reporting (CCR) gives you more insights on what your customers are doing with other lenders than ever before.
The gold mine of extra insights is helping lenders better understand information like an applicant’s appetite for credit, their performance on other accounts and their overall credit exposure.
The additional insights reveal more customers in the market that are lower risk than originally expected. They also reveal a smaller number of customers in financial distress that were previously covering their tracks.
With that, lenders are choosing to either grow their portfolios while maintaining their existing levels of bad debt or, alternatively, reducing bad debt with the same number of customers.
Benefits for all account types
Leading lenders across all account types are setting higher standards for customer service and responsible lending by offering more suitable products to each customer. Rate-for-risk products, for example, are on the rise with different rates tailored to different risk groups.
For each type of lender, new questions can be answered with CCR…
- For credit card lenders, should you authorise a transaction over the account limit or take steps to reduce your exposure?
- For personal loan lenders, h
- For auto lenders, are habitual late payers deteriorating to the point of repossession or are they just lazy about repayments?
- For mortgage lenders, can you reduce the time to yes by verifying they have disclosed all existing debt and analysing previous repayment behaviour?
Getting in early will set the stage for future growth
CCR is in the beginning stages of adoption, but that can be expected to grow as more and more lenders share their insights. By waiting, you risk losing the additional customers your competitors may pick up or taking on higher risk customers your competitors decline with their additional insight.