Sharpening Decisions With Alternative Data [Podcast]

Chuck Berend, Senior Vice President, Chief Risk Officer at First Investors Financial Services Group

Auto lenders are increasingly relying on nontraditional data as they hone underwriting to gain a competitive edge. Alternative data can open the door to unbanked and under-banked consumers, enabling lenders to extend beyond their typical customer base without assuming too much risk.

“[Lenders] have to broaden their mind to incorporate alternative data,” Chuck Berend, senior vice president, chief risk officer at First Investors Financial Services Group told Auto Finance Excellence. “There is certainly more to the way you lend and operate than saying ‘yes,’ ‘no,’ or ‘under what rate.’”

On top of that, Berend urges lenders to keep in mind that alternative data is quickly advancing as data providers are getting more sophisticated. “The universe of alternative data is really dynamic,” Berend said. “If you are not actively managing [alternative data] then you run the risk of having stale rules in place and miss opportunities — it has to be actively managed.”

In this episode of The Roadmap, AFE chats with Berend to discuss how lenders can navigate the pain points of alternative data and leverage nontraditional credit markers to sharpen decision-making.

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