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Alternative Data and Advanced Analytics: Table Stakes for Unsecured Personal Loans

Traders Magazine Online News, November 26, 2019


Boston, November 19, 2019 — Lenders making unsecured personal loans are leading the financial services industry in their use of alternative data and advanced analytical techniques for marketing and loan decisioning. The insights lenders can obtain on borrower creditworthiness by evaluating large amounts of data—often through machine learning or similar approaches—allow them to offer competitive terms while managing their risk. Alternative Data and Advanced Analytics: Table Stakes for Unsecured Personal Loans, the latest Aite Group report, examines the extent to which consumer lenders use alternative data and advanced analytical techniques.

“The use of alternative data and analytical techniques like machine learning is becoming a necessity for lenders making unsecured personal loans,” states Leslie Parrish, senior analyst at Aite Group. “The need to effectively target credit offers and provide an efficient loan origination journey to qualified borrowers makes the use of a variety of data and the right tools to harness that data a critical part of marketing and decisioning processes,” she explains.

Drawing from the findings of a Q2 2019 survey of 18 U.S. consumer lenders conducted by Aite Group and sponsored by Equifax, this report details the extent to which lenders are using various alternative data sources, the factors driving that adoption, and the challenges and market gaps they perceive.

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