Transforming loan underwriting with advanced transaction insights

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Transforming loan underwriting with advanced transaction insights

How a Fortune 500 financial institution enhanced risk assessment and decision-making with EXL transaction insights

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Intro

Loan underwriting continues to evolve as financial institutions seek faster, more accurate methods to assess risk and make informed decisions. By integrating EXL’s advanced transaction insights into their underwriting process, a Fortune 500 financial institution enhanced its ability to evaluate borrower behavior and financial health. This innovative approach not only improved risk assessment accuracy but also streamlined decision-making, enabling a more efficient and effective underwriting framework.

The challenge

A Fortune 500 financial institution recognized the untapped potential of bank transaction data to revolutionize their loan underwriting process. However, transforming unstructured transaction data into actionable insights posed a significant challenge. They needed an advanced solution to extract predictive variables that could enhance their creditworthiness model, improve portfolio performance, and streamline decision-making.

The solution

To address this challenge, the institution partnered with EXL and implemented EXL Transaction Insights, an innovative solution designed to unlock the full potential of transaction data. Using advanced text mining algorithms and pre-built features, the solution delivered powerful results, including:

01
<p><strong>Transaction Categorization:</strong> Over 90% of transactions classified into 300+ categories, offering deep insights into customer spending and financial health.</p>
02
<p><strong>Smart Attribute Generation:</strong> Development of 2,000+ predictive variables enabled a granular view of applicants' financial situations for more accurate risk assessments.</p>
03
<p><strong>Model Development:</strong> Collaborated with the client to build a sophisticated credit default model, leveraging transaction insights to enhance the underwriting process.</p>

Outcomes

Implementing EXL Transaction Insights drove measurable improvements in the client’s underwriting capabilities:

15%

<p>Improvement in Risk Discrimination</p>

~15%

<p>Increase in Systematic Decision Rates</p>

Why EXL?

By leveraging EXL's expertise, institutions can seamlessly approve applicants with strong financial health, decline high-risk applicants with financial instability, and verify self-reported income to create tailored offers aligned with repayment capabilities. With EXL, decision-making becomes more precise, efficient, and customer-focused.  

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Transform loan underwriting with
advanced transaction insights

Discover how a Fortune 500 financial institution enhanced risk 
assessment, streamlined decision-making, and improved efficiency.

Download case study