Being a credit risk manager is tough. In India, there are four major bureaus and information gleaned from them can differ - even for the same borrowers! Addressing this challenge head-on is FinBox Bureau Connect, a pioneering tool designed to revolutionise credit evaluation workflows. 

Let’s talk more about the nuanced features of FinBox BureauConnect, and how it helps lenders underwrite better. 

Each of India's four prominent credit bureaus returns distinct information, creating a challenge in credit assessment. FinBox Bureau Connect emerges as a strategic solution, offering a comprehensive, consolidated multi-bureau approach to credit evaluation.

• Despite the four Indian credit bureaus accessing predominantly the same data sources, inherent differences exist in the returned data. FinBox BureauConnect addresses this by offering three strategic approaches to multi-bureau scorecards:  Set Primary Bureau: Constructing a primary bureau scorecard supplemented with incremental data from a secondary bureau, offering a working model even if one bureau is unavailable.

• Pool Bureau Summary Blocks: Building a single scorecard using data from all available bureau summary blocks, though multiple bureau searches are required.

• Bureau Independent: Utilising FinBox Bureau Score’s (FBS) unique matching and standardising approach to aggregate all available data, lenders can generate a comprehensive score independent of bureau scores. 

FinBox Bureau Score (FBS) leverages raw account-level data, departing from traditional reliance on proprietary characteristics. This framework strategically incorporates multi-bureau data and alternative data, enhancing predictive accuracy.

FinBox Bureau Score is an intelligent evolution of predictive credit scores. It provides lenders with a cross-section view of an applicant’s creditworthiness, distilled into a highly predictive score that combines all available data. Developed from a comprehensive set of multi-bureau characteristics covering indebtedness, credit facilities, account performance, and public information, and device data, FinBox Bureau Score offers stability, commercial flexibility, and utilisation of multi-bureau data where available, overcoming the challenges posed by tracking and monitoring proprietary bureau scores individually.

Featuring a robust multi-bureau strategy with  60-70% data coverage, FBS stands out in digital lending. Its innovative approach includes machine learning-driven EMI imputations, income estimation, a nuanced evaluation of financial commitments, and underwriting features like DPD Flag and Over Debt Flag. 

One of our clients, a Non-Banking Financial Company (NBFC), was facing challenges in customer qualification and loan amount determination. The existing process relied solely on bureau scores, and the subsequent journey revealed discrepancies in customer income compared to initial expectations based on bank statement data. This mismatch resulted in the approval of loan amounts that were not commensurate with the customer's financial situation, leading to increased costs per lead.

The primary challenge faced by the NBFC was the reliance on bureau scores alone for customer qualification and loan amount decisions. The subsequent discovery of discrepancies in income based on bank statement data highlighted the need for a more comprehensive and accurate approach to assessing customer eligibility.

The implementation of FinBox BureauConnect proved to be a game-changer for our client. BureauConnect's multi-bureau strategy and FinBox Bureau Score offered a more holistic approach to customer qualification. Unlike the previous system, FinBox BureauConnect provided bureau-imputed income much earlier in the loan journey, allowing for a more accurate assessment of a customer's financial standing.

The integration of FinBox BureauConnect resulted in a notable improvement in the NBFC's operational efficiency and cost-effectiveness.

• Early Income Insights: With FinBox BureauConnect, the NBFC gained access to bureau-imputed income data early in the customer qualification process. This allowed for a more precise evaluation of a customer's financial capacity.

• Reduced Cost per Lead: Despite a seemingly modest reduction, the implementation of FinBox BureauConnect led to a 5-10% decrease in the cost per lead. While this percentage might appear small individually, when processing thousands of users daily, the cumulative impact was substantial. The cost savings contributed significantly to the NBFC's overall financial efficiency.

• Enhanced Accuracy in Loan Amount Determination: The use of FinBox BureauConnect's multi-bureau strategy ensured that the NBFC had a more comprehensive view of a customer's financial profile. This, in turn, enabled the accurate determination of loan amounts, preventing the approval of loans that were not aligned with the customer's true financial capabilities.

By adopting a more comprehensive strategy that incorporates both bureau scores and early imputed income data, the NBFC not only improved the accuracy of its loan decisions but also achieved a notable reduction in cost per lead. This case underscores the significance of a multi-bureau strategy for enhanced decision-making and operational efficiency in the dynamic landscape of non-banking financial services.

In a landscape where credit information is pivotal, adopting FinBox BureauConnect is not just a strategic choice; it's a visionary move toward a future where credit decision-making is empowered by the comprehensive insights derived from a multi-bureau approach. The FinBox Bureau Score, a product of years of underwriting expertise, is a testament to the commitment to accuracy and innovation.