During the loan process: Reluctant to abandon manual review

Business Operations Management

The lending-in-between stage is viewed as the risk handler and dealmaker after the credit assessment and scoring, serving as the bridge from risk transmission before the loan to after the loan.

◎ Building Risk Control Models

Based on the results from the feedback received, in the lending-in-between stage, all 16 consumer finance institutions interviewed mentioned building a real-time credit approval system using technologies such as artificial intelligence, cloud computing, and big data. In addition, 3 institutions use a traditional approach that combines manual work with risk control systems.

Dynamically managed risk control

Build digital infrastructure in-house

◎ Repayment Ability Is a Key Focus of Risk Control

Based on the content provided by the 16 consumer finance institutions, when it comes to classification and management of users in the lending stage, consumer finance institutions comprehensively assess users’ repayment ability across multiple dimensions, such as historical credit, asset conditions, and consumption stability.

Comprehensively assess repayment ability

Multi-Dimensional Data

In the lending-in-between stage, constructing complex risk models and a strategy system related to balanced access and pricing cannot be done without advanced machine learning algorithms, nor without rich data.

◎ Data Use and Collection

Judging by the sources of data collection, the 16 financial institutions interviewed overall adopt an approach that deeply integrates internally accumulated massive user data with foreign exchange market data. Leveraging the advantages of borrower data accumulation, they conduct deep data mining based on complex business scenarios and massive data (603138), aggregating all kinds of risk data of customers.

Fine-tune user profiles with precision

Collect data from multiple parties

◎ R&D Progress and Outcomes

According to the data reported by the 16 institutions interviewed, because of differences in scale and revenue, there are also significant disparities in R&D investment and technology achievements.

Anti-fraud results are evident

Patent outcomes are polarized in quantity

Difficulties in Business Development

Besides differences in technology-driven investment, when discussing the challenges faced in lending-in-between operations and the solutions, each consumer finance institution also has different perspectives.

◎ Assessment Data Is Still Not Fully Adequate

At present, in China, income, liabilities, and credit reporting data are not yet fully adequate. As a result, when consumer finance institutions assess users’ repayment ability, they lack effective data support.

Solution: Continue to introduce effective and precise third-party income or liability data, develop income-liability verification models for borrowers, and enable fast and effective verification of borrowers’ repayment ability.

◎ The Contradiction Between “普” and “惠” Becomes More Visible

Against the backdrop of an overall interest rate reduction in the consumer finance industry, the contradictions between consumer finance’s “普” and “惠” have become more visible, and increasingly fierce market competition has also imposed higher requirements for refined operations of existing customers. These include more precise pre-event interception and control of high-risk users, and improving user stickiness.

Solution: Continue to advance digitalization. Use technical means to improve customer acquisition efficiency and reduce manual costs, and use technical means to address the difficulties encountered during business development.

(Editor: Ma Jinlu HF120)

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