2023-07-17 19:13:44
In the world of Retail and the country’s businesses, Access to credit plays a crucial role for the growth and development of society. Technologies such as: credit score, business reports, and decision engines are tools that allow people to assess the ability to pay and facilitate the process of granting financial products, automating it.
The development of these new technologies has allowed a significant transformation in the credit evaluation processes, which, although it benefits people because it minimizes human error and takes information not only from one, but from multiple data sources, also allows financial businesses to be able to process credit applications in a faster, more automated and precise way, optimizing their operations and providing a better service to their clients.
Retail chains are essential in regional economies to promote access to credit. According to data from the BCRA, Retailers represent the only source of financing for 30% of their clients of financial products through directed credit – also called buy-now-pay-later-, while 60% only have some line credit granted by Retailers or other types of non-bank financial entities. Which means that ultimately, if Retail did not exist as a source of financing, many people who are not directly banked would not have access to credit.
Loans became an alternative to finance appliances, clothing and household items.
In this sense, the BCRA indicated in a report from June 2023, that the number of people who accessed the so-called financing from Non-Financial Credit Providers (PNFC) increased in the second half of 2022 and reached 10.1 million individuals.
Given the growth of informal jobs, the delivery of credits to unbanked socioeconomic sectors became an opportunity to be explored by the Retail universe. The technology providers applied to the financial market that have information on potential clients of any type of activity, whether it is a dependency relationship or monotributistas, and other solutions for the automation of the credit evaluation process, such as the SIISA decision engine, provide quick responses in pre-qualification at the time of granting a loan, generating a much fairer social inclusion in the financial market.
What is a decision engine?
It is a computer system that uses algorithms and business rules to automate decision making in a business process. In the case of financial entities, both banking and non-banking, such as Retail and businesses, this tool is used to analyze applicant information and determine if they are eligible for a loan or other financial product.
Decision Engines They analyze multiple variables, such as credit history, income, payment behavior and other relevant data to calculate the risk and payment capacity of each credit applicant. This allows a more complete and accurate evaluation, providing a comprehensive view of the financial situation of those who apply for loans.
The automation of decisions in credit processes and the analysis of the information of the potential client in a fast and precise way, together with the possibility of customizing offers and services for each applicant, allows granting credits to unbanked people, reducing the bias in the evaluation of the delivery of loans, and analyzing the ability to pay beyond the socioeconomic level or area of residence.
Definitely, new technologies that promote access to credit through automation have fostered social inclusion in the financial market, providing equal opportunities to unbanked sectors and promoting fairer and more equitable economic growth. The challenge lies in continuing to expand access to credit in a sustainable and responsible manner, with technology as an ally.
Mariano Sokal, director of SIISA.
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