Within the first year of launching, RiskView had shown its value as a credit analysis tool by turning Kinecta's loan refinancing offering into a sustainable product, with the charge-off rate reduced from 20 percent to just 7 percent.
Thomas C. Brown, senior vice president, U.S. Commercial Markets and Global Market Development, LexisNexis Risk Solutions, comments: "Every day the strategists and data scientists at LexisNexis Risk Solutions work to solve two of the greatest issues facing companies, regardless of industry -- financial inclusion and transparency. The fact that Kinecta has lifted more than 15,000 families in L.A. out of the payday lending debt cycle and into the mainstream financial system shows the power of alternative data-based risk-scoring models, which LexisNexis Risk Solutions pioneered more than 20 years ago."
Ankush Tewari, senior director, Credit Risk Decisioning, LexisNexis Risk Solutions, comments: "LexisNexis RiskView is viewed as a competitive advantage by global and community financial institutions that use it to expand their addressable markets and bring more people into the financial system. The accessibility of these loans for people who were previously excluded means that completely new markets will be open to financial institutions and businesses alike. And it gives access to a better quality of life for people who may have been living on the edge."
The Ovum study calls out the Kinecta-LexisNexis Risk Solutions partnership as a successful "example for credit unions and banks to follow in how to offer affordable unsecured credit products to underbanked communities by using additional data in a broader credit scoring model… Kinecta has been supported by a collaborative relationship with LexisNexis Risk Solutions, which adapted its RiskView solution to confront the challenge. Drawing on a wide range of variables, RiskView has shown that customer repayment behavior, and therefore risk profiles, can be adequately predicted using nontraditional data sources, even when dealing with consumers ordinarily assigned as being high-risk subprime, particularly when that has been due to lack of information. Ovum believes that Kinecta's experience provides a valuable example that could help open a large market of customers to mainstream financial institutions for long-term profitable relationships, while also bringing reputation gains as well as commendable benefits for society as a whole."
"Unlocking underbanked communities requires a sustainable and robust new approach to credit analysis. While not without challenges, the use of broader data sources in that analysis may provide a key to achieve that goal," says Matthew Heaslip, analyst, Ovum, and report author.
About LexisNexis® Risk Solutions
LexisNexis Risk Solutions is a leader in providing essential information that helps customers across industries and government predict, assess and manage risk. Combining cutting-edge technology, unique data and advanced analytics, LexisNexis Risk Solutions provides products and services that address evolving client needs in the risk sector while upholding the highest standards of security and privacy. LexisNexis Risk Solutions is part of RELX Group plc, a world-leading provider of information and analytics for professional and business customers across industries. http://www.lexisnexis.com/risk/
About Kinecta Federal Credit Union
Kinecta Federal Credit Union is one of the nation's leading Credit Unions, with more than $3.8 billion in assets and serving over 280,000 member-owners across the country. Through an outreach program called Kinecta Community, Kinecta strives to help make a difference.
Logo - http://photos.prnewswire.com/prnh/20160120/324390LOGO
To view the original version on PR Newswire, visit:http://www.prnewswire.com/news-releases/ovum-case-study-details-steps-to-solve-financial-inclusion-kinecta-federal-credit-union-uses-riskview-to-combat-the-credit-scoring-void-of-underbanked-americans-300363395.html
SOURCE LexisNexis Risk Solutions