MANAGE RISK SERIES PART 2— 3 Ways to Manage Data Effectively & Efficiently
DRN is a 2020 Champion Partner with Allied Solutions
Everyone has felt the impact of the COVID-19 pandemic. Across industries, we have had to shift gears quickly to adjust to changes. DRN data has long been used in collections and repossessions to find more vehicles faster. That has not changed in 2020, as data has only continued to grow in importance in order to strategically make decisions in uncertain times.
When considering how financial institutions can manage risk effectively and efficiently, there’s uncertainty about how the year’s economic impact will influence borrowers’ ability to fulfill their loan obligations into 2021.
Specifically, because financial institutions provided flexible loan modifications and other extensions in 2020, it is being anticipated that delinquent accounts will face increased deficiency balances that age past the normal charge-off period, and consumers will be less willing to voluntarily surrender their vehicles.
As lenders navigate an uncertain road forward, an increased need for accurate data has emerged. Now more than ever, accurate data is needed for an enhanced strategy to be put in place that accommodates incoming risk exposure and an expected wave of delinquencies.
View Part 1 here: 3 Reasons Collections Data is Critical to a Risk Management Strategy in 2021
View Part 3 here: 3 Steps to Implement a Strategic Risk and Recovery Plan in 2021
Data Management is Critically Important
- Leverage Data to Monitor Risk Indicators
Simply gathering data is not enough. By monitoring different indicators in real time, lenders can better assess risk. Ongoing monitoring is important, especially as our day-to-day environment has changed. One challenge this year, borrower migration, has led to inaccurate data as listed addresses may not necessarily be actual addresses. Our technology at DRN can help confirm self-reported addresses with confidence as scores are based on sightings less than a mile from the given address. Clustered vehicle sightings generate new contact addresses that go beyond traditional reporting. By actively monitoring and updating data, lenders can better understand their current risk exposure and put an appropriate strategy in place. - Develop a Long-Term Strategy
Recognizing current challenges facing the industry can help shape and develop a proactive approach to a future post-pandemic risk strategy. It’s important that data is not only being monitored for current challenges but to help predict and anticipate future actions. There’s a lot of uncertainty surrounding day-to-day operations, consumer financial stress, and the economy. While it’s important to address immediate roadblocks, we can’t lose sight of the big picture and we must keep looking forward. Being intentional with a long-term strategy can be critical in stabilizing your business, strategically prompting avenues for growth, and practicing good risk management in 2021 and beyond. Data will be a critical component in:- Anticipating these trends and future scenarios
- Providing your institutions with the information needed to understand current scenarios
- Actively providing metrics so you can efficiently adapt as needed
- But Also Know the Short-Term Plan
While a long-term strategy is critical, it’s also important not just to have, but also to know, your crisis plan for the COVID-19 pandemic impact that will follow us into 2021 as collections and recoveries ramp up. It’s widely anticipated that repossessions will grow and delinquencies continue to rise. Institutions need to have a plan for high volume. Data management will be critical, as it can help target and locate collateral for improved collections, visualize location clusters to help understand consumer migration, and better support your repossession and remarketing agents.
The bottom line: By taking a look at your data, you can better validate your borrower information, more accurately locate collateral, and better mitigate recovery expenses. Additionally, you can build a more effective view of your institution’s risk exposure.
DRN is a 2020 Champion Partner with Allied Solutions.
About DRN
DRNsights Puts Real-time Vehicle Location Data and Advanced Analytics to Work.
From lending to insurance to collections to repossession, DRNsights software and services bring unique insights into your customers and portfolios that can transform your business processes and drive revenue. Our vast network of license plate recognition cameras feeds an expansive database of vehicle images. Our platform of analytic solutions then uses these images to help detect fraud, reduce risk and find vehicles with more speed and accuracy than relying solely on public data.
About Allied Solutions
Allied Solutions, LLC is one of the largest providers of insurance, lending, and marketing products to financial institutions in the US. Allied Solutions uses technology based products and services customized to meet the needs of 4,000 clients along with a portfolio of innovative products and services from a wide variety of providers. Allied Solutions maintains over 15 regional offices and service centers around the country and is a subsidiary of Securian Financial Group, Inc. Allied Solutions has tools and resources that can help you keep an eye on the potential areas of impact, protect against collateral losses, and stay on top of any new events, bulletins, and regulations as they happen.