Are You Pricing Yourself Out of the Market?

The world of commerce is changing. Savvy consumers are shopping online for everything from general household items to financial products. Mobile devices make online shopping even easier. Anyone can compare pricing, terms, interest rates, and even discover what credit products they might qualify for anywhere, anytime. With all of this information so readily available, it’s important for lenders to be one step ahead of the competition when pricing loan products.

Are you pricing yourself out of the market—or even worse—into risk?
 

The Power of Alternative Data in Risk-Based Pricing

Alternative data is not just a tool for discovering credit-worthy underbanked, thin-file, and no-file consumers. It is powerful information that can be applied across the credit lifecycle and is extremely valuable for pricing credit products optimally.

For financial institutions to gain a competitive advantage, offering the lowest price for a loan isn’t always the winning strategy — it’s having more complete information about consumers to enable attractive credit offers while limiting exposure to risk.

How do you make offers that will bring in new customers while maximizing profit and reducing risk?
 

Pricing Optimization is Your Competitive Advantage

Pricing optimization gives you the ability to price loans competitively while assessing risk appropriately. If your competition has more accurate and complete information than you do, they will be able to outbid you and win the business. The reverse is also true. With more complete data, you can price loans higher when the risk is higher, limiting your risk exposure.

An enhanced view into an applicant’s credit behaviors allows you to make optimal credit decisions at all credit levels. The lender that can make the most informed, most competitive offers will consistently win more deals.

To reach qualified prospects, having a sophisticated system for credit decisioning is important. The most effective solution will assess credit risk while not unnecessarily turning away borrowers or pricing ‘out-of-the-market’— and win deals without hurting your bottom line.

Leveraging the power of the ID Network® allows credit risk managers to inject more predictive information into existing credit bureau and custom models, for smarter approval and pricing decisions. Pricing optimization is your answer to having the competitive advantage.