TransUnion announced the launch in the Philippines of CreditVision, its suite of trended data capabilities that has changed the way financial institutions around the world understand, manage and evaluate their customers. CreditVision provides a more detailed and accurate picture of a consumer’s financial behavior over a period of time compared to traditional scoring models.
By analyzing up to 24 months of financial information, versus the conventional approach of looking at data at a single point in time, CreditVision provides a deeper understanding of the consumer’s current and likely future financial situation, enabling more accurate lending decisions. TransUnion’s CreditVision has empowered lenders to offer loans to millions of new customers and new-to-credit individuals in global markets and is set to transform lending in the Philippines where it is unique: the only trended data product available in the market.
CreditVision’s breakthrough capabilities come at an important time, as the economic downturn due to the pandemic is causing rapid shifts in consumer financial situations and changes in consumer actions. CreditVision builds on TransUnion Philippines’ database of 24 million account points that features a more insightful, holistic view into consumer behavior. The trended data solution gives businesses the clarity and assurance needed to lend, predict risk, and continue to support consumers during uncertain economic times. More reliable and highly predictive trended usage and payment data becomes even more valuable when recent signs of consumer financial stress are invisible to lenders; now often the case under COVID-19.
“It is crucial for the finance industry to be proactively identifying both risks and opportunities early on to mitigate credit losses and strengthen customer relationships during these trying times. CreditVision provides a more stable view of which consumers represent good credit risk, positioning it to drive strong consumer and business benefits as the country navigates challenging economic conditions. It also helps those who were previously under the radar be considered as the additional variables and attributes now in play help lenders understand shifts or patterns in the consumer’s behavior, which will enable lenders to offer the right products,” said TransUnion Philippines President and CEO Pia Arellano.
Getting a more complete picture of a customer’s total debt obligation and payment behavior is key to getting an early indication of risk profile changes and being able to make the best decisions in this rapidly evolving crisis. TransUnion’s technology-assisted solutions are specifically crafted to strengthen capacities in order to help effect positive outcomes within the business community and the local economy as a whole.
Extensive Benefits
CreditVision’s trended credit data and proprietary algorithms help lenders achieve better results by truly understanding consumers’ needs and predicting future customer performance more accurately than traditional risk scores. It also allows organizations to lend with more confidence during the COVID-19 pandemic by providing a more comprehensive understanding of consumers who have over time represented good credit risk.
Designed specifically with account management strategies in mind, CreditVision allows lenders to understand consumer behavior to a degree not previously possible, giving a dynamic view of changes in balances, shifts in utilization, payment amount, payment history and more. In contrast to traditional models, lenders can see whose credit behavior is improving over time.
With CreditVision, lenders can both manage losses by pinpointing consumers showing signs of financial stress and improve the customer experience, offering better rates and terms on credit products. This empowers lenders to effectively manage risk and find new revenue opportunities.
TransUnion’s CreditVision delivers strong benefits and creates significant value across the consumer lifecycle, including:
- Onboarding applicants who may otherwise have been rejected;
- Reducing acquisition costs; and
- Improving decisioning across score bands with more granularity and accuracy.
Demonstrated Effectiveness
First launched by TransUnion in the United States, CreditVision has proven highly effective in regions where TransUnion has comprehensive credit data, including Canada, India, Colombia, South Africa, Hong Kong, and, most recently, the UK.
TransUnion India, for instance, saw a client achieve a 28% increase in approval rates at the same risk when using trended data through CreditVision. Meanwhile, TransUnion South Africa saw clients achieve as much as a 56% increase in risk predictability, a 20% improvement in approval rates, and a 29% decrease in bad debt amounts on portfolios when using this approach.
“The bottom line is that being able to predict where a consumer’s performance is heading is actually much more important than where they are at a certain point in time. Prediction enables lenders to say yes to consumers more often because it enhances trust: lenders can see good payment performance of consumers in the past that were never visible before,” said Arellano.
“Some who never qualified for credit before will now be available in the lending market. In the same way, lenders can now offer competitive rates to a new generation of consumers, allow consumers to build up their credit background and increase economic opportunities. As such, the launch of CreditVision in the Philippines represents a major milestone,” concluded Arellano.
