TransUnion data from the end of March 2017 suggests that the consumer credit market is as complex as ever. Mortgage delinquency rates are continuing to drop. Auto loan delinquency rates are rising. The personal loan market is growing but slowing. Access to credit cards is the highest since 2005.
Although 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—the changing credit landscape also creates opportunities for institutions that are fast-moving.
The pace of the market also continues to quicken, requiring businesses to increase the speed at which they make decisions and implement strategies. To support this pace, you need real-time access to data—faster than conventional processes. Easy access to data enables better market understanding and helps you make swifter, more informed decisions.
With now readily-available advanced analytics and tools to help all lenders make smarter decisions in this dynamic business environment, the future of lending is here.
TransUnion’s PramaSM environment already includes Market Insights, Vintage Analysis and Attribute Manager, and offers a uniform user experience which 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.
Our latest additions to the environment are the Benchmarking and Data Extract modules. These offerings further the future of lending here and now, helping you navigate through this complex maze and providing a significant advantage–the ability to gain deeper insights into your own portfolios while comparing books of business to peers at speeds that were unfathomable as recently as last year.
Measuring Business Performance Against Peers
Prama Benchmarking provides advanced data analytics and visualization capabilities specific to the auto loan, credit card, mortgage and personal loan markets, delivering relevant insights for each line of business. Lenders will now be able to measure their business performance across numerous metrics and filters, and compare it with the industry and against their peers. Information available across a wide range of granular metrics and dimensions can be used to improve how financial services companies segment, target, acquire, cross-sell and retain customers. 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 Prama Benchmarking module also goes beyond industry-only views and vintage curves to allow lenders to view 60 months of their performance data at the Metropolitan Statistical Area (MSA) level. The module 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 and 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 of More to Hours
A traditional archive request process, from customer order to product delivery, typically takes a month or more. This includes time spent defining and iterating on the customer’s data requirements. With Data Extract, the process will take less than a day–an enormous time savings.
The Prama Data Extract module provides you with self-service access to obtain and query against 100 percent of TransUnion depersonalized archive credit data, enabling control over how quickly you can obtain the data you need, allowing you to receive faster delivery of data to support your own analytics—in your own environment with your preferred tools.
If you would like to discuss how to benchmark more effectively in a lending environment, please fill out the form below to contact me.