Monthly Archives : May, 2020

More certainty for the consumer finance business amid COVID-19

“Only when the tide goes out do you discover who has been swimming naked.”

Warren Buffett

Those who act fast and adapt to turmoil will survive and succeed. In the context of the Coronavirus pandemic and the lending business, this means that financial institutions should have instruments to continuously analyze on a permanent basis what is happening and react immediately if needed.

As experts in credit scoring utilizing artificial intelligence (AI) and machine learning (ML), we have prepared this publication to offer an in-depth understanding of the problems the consumer finance business is currently facing. We focus on counteraction mechanisms, emphasizing the potential of automated decision-making in general. The dramatic change in people’s lives, the social distancing measures and the heterogeneous impact of the crisis on particular segments of the population, especially employment, as well as the need for additional financing led to a shock for the consumer finance business. As a result, some businesses have drastically reduced their operations and switched their credit scoring processes to manual loan approvals. This significantly reduced the speed and efficiency of their lending process as a whole. Some companies even chose to shut down part of their business abroad due to fears of significant deterioration of their loan portfolio and the negative effect of the imposed legal measures on debt repayment and collateral liquidity.

Retail certainty in an uncertain time

The COVID-19 pandemic is unprecedented in the recent days cataclysm. Countries from all over the world found themselves in a wholly new and, in most cases, unexpected situations. It applies to not just governments and businesses but also consumers.

The retail sector has been shaken by the dramatic change that forced some retailers to close their outlets, others to shift to e-commerce, while other businesses are facing drastic demand surge. When consumer behavior is rapidly changing, the right retailers’ response is essential, and their future might be at stake.