Lending companies from the FinTech sector focus on the highest availability of their services. This does not mean that they are compromising on issues related to testing their clients’ creditworthiness. To improve this process, the non-banking industry, in cooperation with external partners, creates solutions such as ScoreLab. Check how this information exchange platform helps in providing quick loans.
ScoreLab – what is it?
ScoreLab is an initiative created in cooperation with the National Debt Register of Bureau. It is a platform for exchanging information on borrowers’ liabilities. Beneficiaries of ScoreLab are primarily loan companies in Poland. The application gives access to data on customers collected by KRD, which facilitates a reliable assessment of credit risk.
The system includes every customer of a loan company that cooperates with economic information offices. All you need to do is submit a loan application and your presence will be recorded in ScoreLab. The Transaction Risk Assessment System collects both positive and negative information, such as:
- borrower’s payment culture,
- data on applications,
- information on loan decisions,
- information on repaid and active liabilities.
Does ScoreLab change the situation of loan companies in Poland?
What makes the ScoreLab Transaction Risk Assessment System stand out is the detail of the information available. Loan companies gain insight into more data than when they submit a standard inquiry to a credit bureau. However, the biggest advantage of the new platform is the speed of information exchange. ScoreLab is also a very high level of security. Not without significance is the fact that the platform is the result of cooperation with the oldest and largest BIG in Poland. ScoreLab is not the first of its kind.
Before KRD introduced its system, the first solution dedicated to the loan industry was Credit Check. The platform cooperates with another economic information office – KBIG. Credit Check operates on similar principles, also focuses on the speed and security of IT infrastructure. The strength of the platform are 3 modules:
- National Economic Information Bureau – economic information provider on borrowers;
- Loan module – information beyond the scope of economic information, regarding delays in repayments that do not exceed 30 days, or the value of online loans taken by customers;
- Anti-fraud module – is used to assess loan applications for possible irregularities, prevents fraud, protecting against frauds and identity thieves.
Credit Check is under the patronage of the Polish Association of Loan Institutions and the Conference of Financial Enterprises.
Amendments to the BIG Act and creditworthiness testing
The amendment to the regulations on BIGs, which entered into force on November 13, 2017 is part of the so-called debt packet. Its last element will be the establishment of the Register of Public Law Receivables for debtors with arrears to the state treasury. Initially, the Registry was to be launched in early 2018, but the Sejm postponed its inauguration until July. The introduction of the new law strongly interferes with the activities of economic information bureaus and makes it easier for people to gain access to data about themselves.
Due to the amendment to the Act on access to economic information and exchange of economic data, lenders and borrowers will gain access to the resources of all BIGs with just one inquiry. However, this will not radically change the position of solutions such as ScoreLab or Credit Check, which provide data that goes beyond the scope of economic information. This is possible thanks to close cooperation with Polish loan companies, which results in an enriched financial portrait of each borrower.
However, the interest of BIGs may be slightly harmed by the new Registry. RNP is to make its reports available for free, and after the amendment of the act, it will be possible to download information collected in other registers. Still, these reports will not be as comprehensive as those provided by ScoreLab, and it should be remembered that the more reliable the credit risk assessment, the lower the risk that the borrower will not repay the liability.
Reliable credit risk assessment without checking databases
Most loan companies in Poland already cooperate with BIK or BIGs. However, there are fintech tools that virtually eliminate the need for creditworthiness testing through traditional queries. Verification transfers were the first step towards automating the calculation of borrowers’ capacity. They are still functioning today and serve to verify the identity of loan companies’ clients. However, they are being replaced by more advanced tools such as:
It enables the automatic analysis of the history of your payment account. Collecting data from even the last 12 months, MegaInstant AB provides the lender with a comprehensive picture of your finances, which is a reliable basis for making a decision on whether to accept or reject the loan application. The creditworthiness assessment based on account data is made by an algorithm with the highest standards regarding the protection of sensitive data. The API is used, for example, by LendFor, a company belonging to the international Creamfinance group.
Another service based on the screen scraping technique, which enables automatic reading of data from your bank accounts, is the work of Polish programmers. Similar to MegaInstant, Find Matic verifies the financial possibilities of potential borrowers in real time. Thanks to the service, non-bank institutions can assess their creditworthiness in a few minutes without the need to perform a verification transfer. Find Matic also facilitates the creation of scoring models for clients of loan companies. This solution was decided by, among others Wonga, one of the most recognizable lenders on the European market. Another institution that trusted the Find Matic service is Fellow Finance, a company that gives commitments up to 12,000. zł.
Even if lenders decide on modern methods of customer verification or grant quick loans without checking their creditworthiness, this does not mean that they resign from cooperation with business information offices or BIK. Neither MegaInstant nor Find Matic will give insight into any past due customer payments. Cooperation with registers of debtors is still an indispensable element in the verification of borrowers.