Many non-bank lenders base their lending decisions on predictions about which applicants are likely to incur a First Payment Default (FPD)—that is, which applicants are likely to be late making their first payment on a loan. Lenders assume that by predicting FPD they will be able to predict which applicants are likely to default on the loans entirely, resulting in losses for the lender.
We attended this year’s EMERGE Financial Health Forum in Austin in mid-June. This conference, hosted annually by the Center for Financial Services Innovation (CFSi), has long been a major platform for sharing research and addressing trends in consumer finance.
At this year’s Spring Finovate conference in San Jose, California, the consensus among attendees seemed to be that this year’s event was interesting, but hardly groundbreaking. The presentations from roughly 60 companies were mostly developments and refinements of ideas that had been presented in earlier conferences.
Mobile account opening solutions suffer from abandonment rates as high as 80%. To enable more applicants to open accounts on mobile devices quickly and easily, financial organizations need to reduce friction.
Friction is inconvenience. It results from requiring mobile users to type too much or wait too long for data to be verified.
Our new white paper Leveraging Data Analytics to Deliver a Frictionless Customer Journey explains the hows and whys of using data analytics to reduce friction, improve customer journeys, and increase application completion rates.