How can Alternative Data help reduce fraud risk?


In the current economic dynamic, banks face increasingly greater challenges in assessing the risk associated with their clients. Traditional methods of credit evaluation, which primarily rely on historical financial data and traditional customer knowledge processes (KYC), are no longer sufficient to efficiently identify fraud or default risk. 

Therefore, adopting an innovative method that utilizes alternative data proves to be a safer approach for financial institutions. 

By using alternative data, financial institutions can obtain a clearer and more up-to-date picture of their clients’ financial behavior, leading to an increase in the financing rate and fostering an inclusive economy. 

One of the main advantages is the reduction of fraud and default risk. By carefully analyzing alternative data, potential fraud can be more easily identified.

Furthermore, the use of alternative data in credit evaluation allows banks to offer personalized and tailored solutions to meet the needs of their clients. Banks need to keep up with technology and adopt innovative solutions to ensure a secured financial environment. 

By having a deeper understanding of their financial behavior, banks can offer more beneficial lending conditions and develop innovative financial products that better meet the requirements of their clients.

How can banks access this Data?

iFactor comes to the aid of financial institutions with a credit intelligence service that accelerates Bank analyst’s achievement, from sales to underwriting and monitoring, using advanced AI technology and proprietary modeling to revolutionize credit risk assessment. 

iFactor Pure Analytics uses alternative data sources such as Social Media, Telecom or Psychometric profiling, Digital online Footprint, and Transactional Behavior (Open Banking) to streamline processes, reduce fraud and default risks, and optimize the credit process. 

Therefore, iFactor offers a robust software solution that helps financial institutions perform faster and more detailed analysis of small and medium-sized enterprises (SMEs) and large companies that apply for credit, and identify financing opportunities for them.

In conclusion, the use of alternative data in assessing fraud and default risks represents an innovative and efficient solution for financial institutions or large corporations in need of this type of analysis.

Leave a Reply

Your email address will not be published. Required fields are marked *