The Promise of Alternative Data Sources Unlike the conventional model, where banks heavily relied on historical data and lengthy manual underwriting, the use of alternative data can reshape the way financial institutions approach lending decisions. Alternative data offers a powerful solution to the challenges of traditional lending methods. For example, U.S. lenders using a service like Biz2X can improve lending decisions and reduce portfolio risk by using near real-time data-driven insights from Mastercard’s Small Business Credit Analytics solution on consenting small businesses. The data seamlessly integrates with the existing information a bank has about a client, allowing banks to analyze trends that would not be visible with traditional financial statements. Data like this includes sales trends, giving the lender a timely picture of a business’s economic prospects. The Benefits to Clients from Data-Driven Underwriting Better credit data empowers lenders to grow sustainably by also empowering their clients. Alternative data tools are particularly beneficial for companies in traditionally underserved communities and for those lacking an established financial track record. These companies are used to a rigid banking system that often either keeps them outside of the financial lending system or delays their financing due to endless rounds of review. Alternative data sources offer the opportunity for promising small businesses to prove they are stable enough for additional capital or a new credit line. This speeds up the approval process and offers the opportunity for banks to delight clients, which will lead to these clients increasing their banking services with that same bank. Data Strategy: The New Growth Channel for Banks Adopting alternative data for credit decisions is the undervalued growth strategy for banks and lenders to pursue. The key lies in balancing traditional underwriting discipline with modern, data-driven approaches, creating a dynamic and efficient lending process that benefits both financial institutions and their clients. If lenders want to grow in this dynamic economy, better data must be part of the plan. Biz2X is the digital platform chosen for business lending at banks and financial institutions around the world. Biz2X is built on the insights and expertise that came from a decade-plus of Biz2Credit’s lending experience. That’s why the platform works so well for lenders of all sizes, whether they’re digital lending experts or just starting their online lending journey. Learn more at www.biz2x.com. “Over my 16-year tenure with Bankers’ Bank of the West, every minute of our work has been dedicated to bringing solid expertise, services, and products to ensure community banks sustain a competitive edge. We’ve certainly grown strong as partners, looking out for each other—and we look forward to continuing that tradition.” Bankers’ Bank of the West LOAN PARTICIPATIONS|MERCHANT SERVICES|ATM DEBIT|WIRES bbwest.com | 800-873-4722 www.bbwest.com President and CEO Bill Mitchell We Champion Community Banking Member FDIC 11 Colorado Banker
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