Lenders are feeling data overload, survey shows

Lenders have an abundance of data at their fingertips to analyze portfolios and analyze trends, but some lenders are feeling a data overload.

About two-thirds of lenders are overwhelmed by immense amounts of data, according to a TransUnion survey of 309 lenders. More than half said it is difficult to discover useful insights with so much data. Despite the frustration, though, 70 percent of lenders said they want direct, immediate, self-service visibility into their analytics, TransUnion found.

Lenders’ data, which can include industry trends, peer benchmarks, geographic or credit segment information, “is necessary but it’s very hard to handle and manage” Steve Chaouki, TransUnion’s executive vice president of finance, told Automotive News.

“It’s a very big set of data. Because there’s so much of it, it takes a lot of money to manage. There’s good data that’s very difficult to access,” and some lenders are limited because they don’t have enough staff to sort through it.

2 modules

TransUnion offers what it calls Prama Insights, which includes its Market Insights and Vintage Analysis modules. The market insights module shows lenders metrics at a state, regional and national level. The vintage analysis shows lenders seven years of their performance data, such as delinquencies and charge-offs.

Prama Insights shows lenders an industrywide credit file so that they can compare their performance to that of their peers nationwide and the industry as a whole. None of the lenders is identified.

“Our research found half of lenders say their organizations are driven mostly by intuition and the experience of managers rather than by analytics. Yet, 80% of lenders believe that improving their analytics capabilities would make their organizations more competitive,” Chaouki said in a statement.

‘Is it just me?’

TransUnion’s Industry Insights Report tracks delinquency rates on a quarterly basis. But Jason Laky, senior vice president and automotive and consumer lending business leader for TransUnion, says many lenders look at their own portfolios monthly. “Inevitably, you want to dig in and understand why [rates are rising or falling]. First, is it just me or the industry? Is it isolated to geography or credit tiers?” Laky said.

In the old process, the lender would call TransUnion for an explanation, which could take weeks to deliver, Laky said.

With TransUnion’s Prama modules, lenders can look at data going back seven years to “answer bigger questions faster [and] take action to manage [their] own portfolio,” he said.

Lenders can benchmark themselves against the industry and look at factors such as geography and credit segment and compare them to the industry. They can spend time engaging with data and analyzing it instead of structuring it, Chaouki said.

You can reach Hannah Lutz at hlutz@crain.com

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