Streamlining Consumer Lending: Pricing Analytics & Credit Risk Decisioning on a Single Platform

Rising delinquencies are being reported across all consumer lending lines, according to Q2 2024 Quarterly Credit Industry Insights Report (CIIR) from TransUnion. This trend, coupled with increasing competition, squeezing margins, and growing profitability pressures, makes lenders reflect on their loan pricing and credit risk strategies.  

While some lenders decide to pull back from certain lines of business such as auto lending or unsecured consumer loans in favor of more profitable and less risky ones, others focus on reworking their underwriting standards and tapping into technology to support financing volume growth.

In such a tumultuous landscape, investing in underwriting and decisioning efficiency and accuracy, as well as improving the overall lending technology makes a lot of sense.

Answering the market demand for a streamlined pricing and credit decisioning technology solution, we are proud to introduce Earnix Lending Plus. It’s an AI-driven software solution that offers combined pricing optimization and credit risk decisioning on a single platform.

During my 12-year tenure in the financial services industry, I witnessed numerous lenders stressing out about complex and fragmented solutions requiring multiple handoffs, disjointed pricing and risk teams, and an inability to see the “big picture” of their lending portfolio performance. Pricing and risk teams often struggle to accurately forecast loan profitability or volume based on changes in pricing strategy or adjustments in underwriting rules.

Earnix Lending Plus solves these issues by combining advanced price optimization and simulation capabilities with automated, AI-driven credit risk decisioning in a single solution. Lenders can easily run joint simulations and assess the combined impact of pricing or credit policy changes for a smarter, automated lending operation.

Let’s get a deeper dive into the transformative benefits of Earnix Lending Plus and help you understand where this solution may help speak to your operational, profitability, or other concerns.

Complete Profitability Management

Earnix Lending Plus facilitates complete profitability management by integrating advanced pricing analytics, price optimization, and simulation capabilities with automated credit risk decisioning. This powerful combination allows lenders to forecast the impact of decisioning logic changes before they are implemented, ensuring that each lending decision is optimized for risk, profitability, volume, and other KPIs.

Credit Automation

By integrating these two critical functions, the platform streamlines the credit approval process, significantly reducing manual interventions. This not only speeds up the process but also reduces the potential for errors, enhancing the overall efficiency of credit operations.

Enhanced Customer Experience

Joint pricing and risk decisioning simulations and forecasts also improve the customer experience by enabling more personalized and accurate financing options. For instance, Alternative Deal Structures can be optimized and decisioned in real-time, minimizing rehashing, improving customer satisfaction, and increasing loan acceptance rates.

Improved Financial Inclusion

Today, AI-driven strategies can factor in real market, competitive, and customer data (and many other sources of information), to enable lenders to test models and adjust the results accordingly. Sharing AI models for pricing analytics and credit risk decisioning allows lenders to offer loans to consumers outside of standard credit profiles, without exposing lenders to undue risk.

Increased Operational Efficiency and Reduced Costs

The platform supports real-time updates and decision rule changes without the need for IT handoffs. This aspect of the platform leads to increased operational efficiency, as changes can be made swiftly and seamlessly, reducing downtime and operational costs.

Built-in Governance and Control

A fully auditable and transparent process ensures that every quote and every decision is recorded and traced for audit and compliance purposes.

Where Do We Go from Here?

The integration of AI-driven pricing analytics and credit risk decisioning on a single platform is a game-changer for consumer lending institutions and auto finance captives. Earnix Lending Plus drives the selection of the right risks more efficiently while elevating credit approval automation rates and reducing manual interventions. We can now share data, models, simulation scenarios, and predictive analytics between pricing and risk teams to allow lenders to see the big picture of their pricing and credit policies in action. As a lender, you can now predict profitability, risk, and loan volume outcomes more precisely. This results in faster and more educated offers to consumers for every loan offer made and ensures that each lending decision is optimized for risk, profitability, volume or any combination of KPIs set by you, the lender.

I encourage you to learn more about Earnix Lending Plus and request a personalized demo.