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Introduction

A review of how Kinecta Federal Credit Union addressed the problem of credit scoring underbanked consumers using richer analytics provided by LexisNexis Risk Solutions.

Highlights

  • Kinecta’s experience provides a valuable example that could help open a large market of underserved customers to mainstream financial institutions for profitable, long-term relationships, while also bringing reputation gains as well as benefits for society as a whole.

Features and Benefits

  • Assesses the effectiveness of using rich data analytics solutions as a substitute for, or in addition to, traditional credit scoring techniques.
  • Analyzes how financial institutions can best implement new credit analysis tools.

Key questions answered

  • Can broad data sources prove as effective as detailed financial histories in analyzing the risk presented by individual consumers?
  • How can financial institutions reduce the risks involved in launching new credit analysis tools and products?

Table of contents

Summary

  • Catalyst
  • Ovum view
  • Key messages

Recommendations for the industry

  • Additional data can open seemingly risky markets to sustainable lending
  • Preparation and adaptability is everything for vendors

Developing a new underwriting model at Kinecta

  • Adding nuance to underbanked consumer assessments
  • Building a new credit scoring system

Lessons learned

  • Richer data can tackle fear of the unknown
  • Solutions should be able to quickly adapt to market requirements
  • Small project teams can deliver big results with the right approach

Appendix

  • Methodology
  • Further reading
  • Author

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