How Winning Lenders Enhance Analytics For Profitable Growth

The COVID-19 pandemic's financial impact on key sectors of the economy has triggered some tightening of business and consumer lending requirements, and banks have been imposing more stringent standards for borrowers, especially consumers.

This change is borne out by the Fed's July 2020 Senior Loan Officer Opinion Survey on Bank Lending Practices. In addition, leading banks continue to increase reserve rates on consumer loan portfolios in anticipation of higher delinquencies to come.

While many traditional lenders have pulled back from consumer lending due to new uncertainties in their risk model and funding pressures, other competitors are pursing profitable growth. There is an opportunity in the consumer lending space to capitalize on market opportunities created by lenders' tightening of the traditional FICO-based credit box, as one executive puts it. Savvy banks can outpace the competition by maintaining marketing programs aimed at driving customer acquisition.