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Smart Data Instead of Big Data: Real-Time Lending through Intelligent Data Analysis

19. October 2018 / in Trends

When it comes to data analysis, Big Data is one of the big buzzwords of our time. Thanks to automated processes, companies generate large amounts of data points every day, both in structured and unstructured form. Big Data has been the trend for several years now and FinTechs also use it to develop new products and to provide services. There has been enormous investment in these processes and technologies across all industries. Can this be justified? Yes and no. Proponents like to list the benefits of Big Data, but there are an increasing number of critics stating that Big Data on its own is not enough – Big Data has to become Smart Data.

Too many people latch on to the amount of data instead of focussing on its quality. Click to tweet

Given the effort that is often required to collect data that will not be used or that will later turn out to be the wrong data, the efficiency of this method is questionable. Sometimes the capacities or tools to interpret the data correctly are simply missing. In order to become analysable, the amount of data must first be standardised, defined, bundled and put into context. Only appropriately prepared data provides real insights. Without this, Big Data would merely be an unmanageable mass of data.

When used intelligently, Big Data delivers what it promises. For the Digital Account Check, large amounts of data are the first step on the way to a comprehensive end product for both bank and customer. The term ‘Smart Data’ comes into play when developing this product. In this article, we not only explain how the Digital Account Check works, but also how Smart Data is used to achieve optimal results.

Big Data: yes or no? In our article Big Data in the Banking and Financial World: Hype or Healing?, we discuss the pros and cons of Big Data and what role it plays for banks and FinTechs.

Smart Data Is the New Big Data

Taking into account the company’s interests or simply the purpose it is designed to serve, Big Data can be individually filtered and analysed to provide real added value. Big Data becomes Smart Data when it is strategically collected and optimised.

Smart Data is Big Data – cleansed, filtered and placed in the right context. Click to tweet

Big Data is often defined by the five “V”s:

  • value
  • variety
  • volume
  • velocity
  • veracity

Smart Data primarily contributes to less volume since only useful information contributing to the solution of the problem is presented. Variety can decrease, though it does not have to. This depends on the screening process used to filter the data. In the case of the Digital Account Check, only data relevant to lending process is collected. Here the value, velocity and veracity of the collected data are all improved by the reduction in volume.

Smart Data for the Digital Account Check

If you want to validate the details of a loan applicant, you need one thing above all else: time. The Digital Account Check converts Big Data into Smart Data to shorten this process. The collection and analysis of all important data is central to the Digital Account Check. In order to obtain correct results, it is not the wealth of data that is decisive, but rather the method of analysis. The magazine WIRED summarised well when they said:

“Smart Data” is information that actually makes sense”

Big Data serves as a starting point for extracting and categorising useful information, including transaction history. Only useful data is evaluated for the Digital Account Check: data required to carry out the expenditure account, to calculate the financial capability and to filter the amount of data using criteria relevant to creditworthiness. With this strategy, the bank receives exactly the information it needs – aggregated and individually compiled.

Fast, transparent, secure: why the Digital Account Check creates a win-win situation for everyone involved.

Smart Data für den digitalen Kontocheck

More than a Long List: Enrichment and Preparation of Data

The slogan of the Digital Account Check is “as much as necessary, as little as possible.” This principle makes life easier for everyone involved, because no one wants or needs irrelevant data. As soon as the customer gives their consent and confirms the data, the provider of the Digital Account Check obtains all the supplementary information required to approve an immediate loan. This includes credit agencies, fraud checks, PEP matching or address verification. Once everything has worked, the loan agreement is directly released for signature. No printer is required! Signing is legally secure and completely digital with online tools such as WebID Contract Qes or IDnow eSign. It couldn’t be any easier for the bank or the customer.

In addition to collecting and analysing relevant data, processing is an important aspect of Smart Data. The Digital Account Check provides all data in verified form for a real-time loan decision. All customer data is checked for completeness and plausibility, resulting in a complete risk picture. This includes personal, financial and economic key figures, accounts and the customer’s credit history. This information is transferred to the bank, which then only has to grant the actual loan. For banks, this means PSD2-compliant data sovereignty and significantly lower operational expenses.

Interested in a solution that enables real-time credit checks? Contact FinTecSystems for more information about the Digital Account Check!

Smart, Fast, Thorough: The Digital Account Check Makes Life Easier for Banks and End Customers

At first glance, the Digital Account Check appears to be a simple collection of customer data. However, when you look closer, it is much more than that: collecting data is just the first step in a process that extends from in-depth analysis and customised preparation to customer-specific presentation. After all this, it is ready for the customer to sign. Though this process may seem complicated, the data analysis tool takes care of everything, which makes it much easier for banks to grant loans. Thanks to Smart Data, the Digital Account Check becomes a fully-fledged product that banks only have to handle in the last step when they give the green light for the granting of the loan.

Schlagworte: Trends

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