TransUnion launches cutting edge predictive data set

Denzel Landie, Director of Credit & Risk Consulting for TransUnion.

In tough times, credit lenders face increased risk, negatively impacting profitability. To meet the market’s need for improved risk management, TransUnion has bolstered its risk scoring variables suite with the introduction of Credit Vision®. Credit Vision® is the next-generation of consumer credit profiling data tools that is highly granular, offering more than 3 400 variables across 19 refined industries to increase risk predictability.

TransUnion is a leading consumer and commercial credit bureau, managing the credit information of more than 22 million credit-active South Africans. TransUnion aggregates, segments and analyses this data, delivering information solutions to help businesses assess and manage risk, and facilitate commerce.

“Better insight into the risk profile of a potential client or segment of clients is invaluable, helping organisations improve marketing, risk management and collections decisions,” says Denzel Landie, Director of Credit & Risk Consulting for TransUnion. “With recent amendments to the National Credit Act (NCA) to further address reckless lending, banks and other credit providers are placing increasing emphasis on ensuring affordability and understanding client behaviour. Credit Vision® meets that need.”

TransUnion continually aims to provide access to more complete and multidimensional information, enabling better decisions and greater certainty. TransUnion’s journey towards even greater insight and predictive power has ultimately resulted in Credit Vision® which leverages additional data streams and enhanced algorithms. These next generation credit management solutions provide deeper insight into customer behaviour, helping with better decisions and the ability to achieve great things. We call this Information for Good.

Developing Credit Vision®

TransUnion’s previous risk variable suite provided a comprehensive view of the consumer, comprising an aggregated consumer profile, including payment profile detail for a period of 24 months within a particular type of credit extension industry.

However, Credit Vision® adds more granular, industry-level variables that take into consideration key factors which impacts risk in specific sectors, as well as the behaviour of customers in these sectors. The 19 sectors covered by Credit Vision® include retail, banking, and the unsecured loan sectors, amongst many others.

Credit Vision® has already proven its worth in a “champion challenger” strategy for the personal loans division of one of the big four banks. By utilising the new suite of variables, TransUnion showcased up to 40% improvement in risk predictability in certain segments.

Landie noted that with more accurate scorecards, organisations can differentiate the good customers from the bad even further and make more profitable decisions, reducing credit losses, and increasing revenue. Improved scorecards can also be used to drive strategies – intelligently and selectively grow market share; price products more granularly; and employ appropriate strategies in high-risk areas of portfolios.

The enhancements

Credit Vision® assists organisations with enhanced data analysis, customer profiling, market segmentation, model development, customer acquisition, account management and collection prioritisation.

Specific feature enhancements over the previous suite of variables include:

• Improved granular and segmented data types;
• Shorter time intervals - activity within the last 14 days or month;
• Amounts in arrears at different points in time;
• Aggregated views - average amounts or behaviour over a time period;
• Increased accuracy through removal of duplicated enquiries;
• Increased visibility - sole proprietors, joint accounts and deferred payments;
• Refined loan industries; and
• Enriched layout - currency values have increased to nine digits assisting with more accurate affordability assessments.

“Typically credit providers will develop a strategy based on their portfolio, how aggressively (or not) they want to grow, and whether they want to target existing or new customers, or both,” says Landie. “With greater depth to the data, 3 400 more variables to help segment customers, and insight into industry specific behaviour and factors, organisations can build better scorecards and strategies making improved and more profitable decisions.”