Account credit Score
Consent-based access to a customer's multiple bank accounts, governed by PSD2, represents a tremendous opportunity for financial institutions to assess a customer's credit risk with even greater reliability than existing valuation models.
In particular, analysis of the customer's multi-account transactional history helps the bank to estimate the client cashflow, and thus their likelihood of repaying a loan, in the absence of the information typically used for this assessment. This is the case, for example, when the counterparty is not a client of the bank, or when it is someone who has never applied for a loan before, and therefore has no credit history. The account credit score is an additional tool for a more accurate risk assessment also of existing clients of the bank.
The account credit score is proposed, with different transaction analyses and algorithms, for both retail and corporate counterparties.
By its nature, it represents an important evaluation tool both in the credit approval phase (for example, for a retail instant lending product), and in the subsequent phase for periodic monitoring of the client.
The account credit score is mostly used for digital (instant) lending. The service allows customers and prospects to be offered a loan immediately and through a digital process, both fully digital (for example, through a mobile banking app) and alongside traditional branch processes.
The modules of the digital instant lending offering enable to quickly onboard customers, thanks to the new technologies of automation, artificial intelligence and biometrics that speed up identity, AML and anti-fraud controls.
Moreover, thanks to PSD2 and the access to the customer's multi-bank transactions, it is possible to verify the customer's creditworthiness, thanks to the use of transactional scoring.
A mortgage is one of the most complex and labour-intensive retail finance products for the bank. Several months can pass between the initial application and the disbursement, hampered by the number of documents that both parties have to produce and by the poor digitalization of the entire process.
Financial institutions are increasingly experimenting with digital mortgage solutions. These solutions are digital workflows, composed of modules that can also be integrated individually into the bank's processes, which accelerate, for example: the initial application phase, digitizing the collection of documents and retrieving information where possible without asking the client (e.g.: through data aggregators); the profiling and selection of the most suitable loan for the customer needs; the credit assessment and the processing of the response, using, for example, the analysis of the customer's multi-account transactional history (ref. also "account credit score"); the continuous dialogue with the customer throughout the origination and disbursement process.