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TransUnion unveils new credit scoring solution

Sibahle Malinga
By Sibahle Malinga, ITWeb senior news journalist.
Johannesburg, 06 Feb 2018
Lee Naik, CEO of TransUnion Africa.
Lee Naik, CEO of TransUnion Africa.

Consumer credit reporting agency TransUnion has introduced its new credit scoring solution, CreditVision, which the company says uses artificial intelligence (AI) to revolutionise how lenders offer credit to South African consumers.

TransUnion is a credit bureau which provides its clients with consumer profiles and credit reports, giving them a broader and deeper view of a consumer's financial portfolio.

Speaking at the launch of CreditVision in Johannesburg today, Lee Naik, CEO of TransUnion, said the new product offers a more accurate and comprehensive method of determining a consumer's credit scoring.

"TransUnion's CreditVision provides a fundamental way of approaching a consumer's credit record. It uses machine learning to make predictions that have not been done before - through looking far back into the history of a consumer. The AI focuses on finding the consumer's spending patterns in the available big data, using smart algorithms. The system is able to predict future behaviour of the individual, using structured or unstructured data, it then hyper customises or personalises the products based on the profile of the consumer," he pointed out.

CreditVision targets a wide range of service providers, which include financial institutions, insurance companies, credit providers, and retailers. The system utilises alternate and trended data to gain a more holistic view of a consumer and identifies trends in their credit behaviour.

"When lenders use this information and can access it broadly across the consumer wallet, it allows them to better tailor their products to consumer performance, which builds better loan relationships and helps everyone in the long run," explains Naik.

Traditional credit scoring models, he continued, only provide a limited view of a consumer at a specific point in time. The company has 700 people in its Africa business who work tirelessly to find new ways of making things work better, using the latest methods, he continued.

However, Naik explained that the company is not in a position to disclose information on the sources and methods used to find the consumers' financial information.

This TransUnion model, according to Naik, has already seen success in the US, Canada, India and Colombia and in SA. The system went through a year-long trial phase. "We have seen as much as a 56% increase in risk predictability when using our CreditVision model locally. In addition, we have seen as much as a 20% improvement in approval rates and a 29% decrease in bad debt amounts."

A recent TransUnion study identified 3 million consumers who previously could not gain access to credit using traditional scoring models. With the power of CreditVision's alternative and trended data, financial institutions can now see these consumers in a different, more positive light, says TransUnion.

CreditVision can play a key role in tackling the lack of financial inclusion in SA by allowing people to access the credit they need at a cost that reflects their true risk profile and ability to repay, concluded Naik.

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