Reducing default risks through the convergence of open banking and data analytics

Open Banking meets Data Analytics

Account transaction data reflects the entire life of the customer, so to speak, and is therefore an excellent source of information for advisors. In order to use this, existing data must be categorized in a comprehensible manner and data streams must be visualized. This is exactly where innovative data analytics solutions can help by relieving the consultants of this work. With the help of intelligent algorithms, they categorize and analyze the transactions in order to generate valuable knowledge from them.

The result is a transparent overview of all income and expenditure as well as monthly deficits or surpluses. This gives advisors a broad view of the financial situation of new customers, which they can use when checking their creditworthiness. Such a digital financial check can also be used efficiently for existing customers. In this way, banks can derive sales impulses if a changed financial situation becomes transparent for customers.

Advisors then have the opportunity, for example, to recommend debt restructuring to customers with financial bottlenecks and to offer them a loan with smaller installments and a longer term. Another starting point where data analytics solutions help are so-called life-changing moments, such as changes in marital status or retirement. These are also good occasions to put the current loans to the test and to propose alternatives