Changing credit landscape creates opportunities for fast-moving lenders

As TransUnion (NYSE: TRU) data from the end of March 2017 suggest, the consumer credit market is as complex as ever. Mortgage delinquency rates: continuing to drop. Auto loan delinquency rates: rising. Personal loan market: growing, but slowing. Access to credit cards: highest since 2005.

Maneuvering through this ever-changing credit landscape is difficult for lenders of all sizes, ranging from credit unions to regional banks to the largest financial institutions. To help navigate through this complex maze, TransUnion today introduced the newest modules in its PramaSM environment – Benchmarking and Data Extract.

“The future of lending is here; advanced analytics and tools are readily available to help all lenders make smarter decisions,” said Steve Chaouki, executive vice president and head of TransUnion’s financial services business unit. “The latest Prama modules give our customers a significant advantage – the ability to gain deeper insights into their own portfolios while comparing their books of business to peers at speeds that were unfathomable as recently as last year.”

Prama Benchmarking provides advanced data analytics and visualization capabilities specific to the auto loan, credit card, mortgage and personal loan markets—to deliver relevant insights for each line of business. Lenders will now be able to measure their performance across numerous metrics and filters, and compare it to the industry and their peers. This information can be used to improve how financial services companies segment, target, acquire, cross-sell and retain customers. The Data Extract module provides self-service access to query against 100 percent of TransUnion depersonalized archive credit data, allowing customers to receive faster delivery of data to support their own analytics—in their own environment with their preferred tools.

The Benchmarking and Data Extract modules are the latest additions to the Prama environment, which already includes Market Insights, Vintage Analysis and Attribute Manager. Prama offers a uniform user experience that allows customers to easily navigate key elements of the holistic suite such as self-service on-demand access, unprecedented quantities of data and industry/peer benchmarking.

Measuring Business Performance Against Peers

The Prama Benchmarking module goes beyond industry-only views and vintage curves to allow lenders to view 60 months of their performance data at the MSA level. Information is available across a wide range of granular metrics and dimensions, allowing customers to compare performance to the industry and peers.

Benchmarking provides performance data on metrics such as delinquencies, charge-offs, bankruptcy, average balance and utilization. It offers views of market share in terms of number of accounts, total limit or total balance. The module also lets lenders analyze depersonalized data using dimensions such as APR, origination vintage, credit tier, state or MSA region, account status and consumer credit age.

For instance, a regional bank in Western Pennsylvania interested in growing its credit card portfolio is now able to observe five years of its own data versus other similar banks in their region. The information is accessed in minutes instead of weeks or months, allowing the bank to determine how its performance stacks up against the rest of the industry and its peers. Prama Benchmarking allows the bank to uncover opportunities within certain consumer risk segments such as subprime or prime and see if they should consider expansion into nearby geographies. By digging deeper into other readily available depersonalized data such as accounts, balances and delinquency performance, the bank can use this information to make insightful decisions to grow its credit card business.

“The breadth of data available today in Prama is light years ahead of what we have had at our disposal to date,” said Steve Miller, president of Twenty Twenty Analytics, a premier loan portfolio analytic service provider for credit unions. “We can now spend time analyzing localized or national data, as close to real-time as practical, instead of analyzing aged data or trying to get our hands on a narrow, but current data set for management decisioning. As a result, Prama helps us quickly evaluate and understand changes in the consumer credit market and provides our clients the opportunity to be more nimble in risk management and loan pricing.”

Extracting Data Faster – From a Month or More to Hours

Prama Data Extract gives TransUnion customers self-service access to obtain depersonalized archive credit data, giving the customer control over how quickly they can obtain the data they need.

“To thrive in a dynamic business environment, organizations need easy access to data to help them better understand the market and make faster, more informed decisions,” said Ginny Gomez, senior vice president in TransUnion’s innovative solutions group. “The pace of the market continues to quicken, requiring businesses to increase the speed at which they make decisions and implement strategies. To support this pace, they need real-time access to data—faster than conventional processes available today.”

A traditional archive request process – from customer order to product delivery – typically takes 30 days or more. This includes time spent defining and iterating on the customer’s data requirements. “With Data Extract, the process will take less than 24 hours – an enormous time savings,” said Gomez.

With Data Extract, customers gain the following advantages:

  • Self-service – On-demand, point-and-click access to query TU depersonalized archive credit data.
  • Speed – Secure overnight delivery of the dataset.
  • Confidence – Quick access to depersonalized data to support a customer’s own analytics, so they can make faster decisions with more confidence.
  • Control – Create queries according to their data requirements, avoiding the back and forth that is often typical of an archive request process.
  • Flexibility – Quickly obtain depersonalized data for use within their own analytics environment and processes.

To learn more about TransUnion’s newest Prama modules, please visit: https://www.transunion.com/prama.

Source: TransUnion Press Release