In a recent post, I made the case for why lenders must be able to consistently make profitable originations decisions in diverse and changing credit markets. As a result, it’s critical that origination solutions allow lenders to bring a wider range of analytics to bear on credit applications for sharper profit-loss estimations. They must make it easier to develop origination decision strategies for improved profitability and other business goals.
Building on modular SOA (service-oriented architecture) approaches, lenders can tailor decisioning processes to the specific requirements of multiple credit products and different regulatory environments. At the same time, they gain the efficiencies and economies of being able to share data, scores, business rules and other decisioning elements where appropriate.
This approach enables lenders to make smarter decisions by connecting them. Specific origination decisions—such as pricing, credit line, terms and conditions—that may previously been made in sequential, unrelated steps, are bound more tightly together. Unified decisioning not only reduces processing time and cost, it helps lenders better understand interrelationships between various profit drivers, explore the trade-offs and balance multiple objectives in the best way for their business.
When it makes sense for their business, lenders can extend connections across credit product lines. They can make origination decisions at the customer level, reflecting the total profit potential of the relationship. Moreover when a common architecture underlies all customer lifecycle decisioning areas, lenders can bring insights from customer management, collections and fraud management into originations for even more profitable decisions.