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Greetings from Provenir. My name is Brendan Deakin, Vice President of Sales at Provenir, Inc. I hope all who choose to read this blog post are faring well during this historically challenging time, and are remaining safe, healthy, and productive. This is especially true for those who are living and working in hard hit areas like New York, Michigan, Italy, Spain, and many other areas where the virus has caused every element of society to stop operating in a normal fashion. Our thanks should also go to all of the first responders, doctors, nurses, and other front-line medical staff who risk their lives to ensure we weather this storm as quickly and efficiently as possible.

The Covid-19 pandemic has caused all of us to re-evaluate how we operate across our personal and professional lives.  The ability to separate work/life activities has become an hour by hour proposition for many of us. From the simple process of ensuring our conference bridge/web-based meeting tools work when needed to balancing homeschooling and other home/dependent care demands against that of our respective occupational responsibilities, we are all being tested like never before. As I look across our business here at Provenir, I could not be prouder of our collective team in its ability to quickly and effectively transition to a virtual work environment, all while continuing to support our global financial services clients during a tumultuous time, one ripe with uncertainty. We were and are well prepared for this, and have flawlessly executed our business operations strategy against very trying circumstances.

As the Coronavirus Pandemic expands, our banking and lending clients will have a unique opportunity and role in helping consumers and businesses cope with the economic downturn associated with Covid 19 and need to be prepared to help customers weather these tough conditions. Besides protecting its own employees and service providers in their branches and offices from the physical health threat of the virus, banks need to ensure their business and consumer customers are offered payment extensions or other relief programs, but only as far as their credit policies and balance sheets will allow. Given the disparate impact this pandemic will have on small businesses and consumers, financial services organizations will need to pay particular focus on account management/credit line management and collections strategies which are tailored uniquely to each client’s circumstances, while at the same time helping shore up their reserves and balance sheet.

While there is not a “one size fit’s all” strategy for banks, lenders, and payment companies, we believe those that focus on the following key account management tenants will retain more loyal, profitable customers during this cycle while shoring up their balance sheet to take advantage of market conditions as they improve. The following capabilities should be top of mind for today’s credit risk executives:

• Digitization:  Leverage your digital servicing capabilities to drive more consumers/small business customers to adopt internet and mobile servicing offerings, where and whenever possible. This is especially important for those clients who have been hesitant to adopt these services in the past. Gains made here will help reduce client attrition, improve customer satisfaction rates, all while opening up additional channels to engage and collect from consumers struggling under the financial burdens created by this pandemic.
• Evaluation: As conditions change, for better or worse, it will be vitally important for lenders to evaluate new business rules and decision strategies in real-time/near real-time in order to drive better economic outcomes for the bank and their customers alike. While this is especially true during the Covid 19 pandemic, constant re-evaluation of your credit strategies should become the “new normal”. Those lenders that can execute this new reality will be well positioned during this downturn, and more importantly, as conditions improve.
• Segmentation:  Explore each existing customer relationship by the nature and level of impact associated with Covid 19. This can help cluster customers and frame proactive Account Management strategies designed to not only aid the consumer during a trying time but limit the bank’s exposure to future delinquencies and charge-offs. Programs should be highly targeted to each account/consumer and can include short term payment extensions, new credit lines, fee waivers, collections treatments, and other strategies.

These and other thoughtful strategies, when executed through the right mix of data and technology, can help today’s risk management executives support their consumer and small business accounts through this Covid-19 crisis while limiting the threat to their firm’s balance sheet or the broader financial system as a whole.

Thanks for taking the time to read this!  Spring is upon us, and I wish you all nothing but the best for the remainder of 2020 and beyond.

Stay Safe!

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Just a few weeks into this crisis, the outlook, and vision of what was intended for the financial market in Latin America, was dramatically advanced. And based on these changes, experts argue that it is time to trust technology more and to adopt and accelerate its use in the products and services that various financial institutions market.

What are the advantages of Fintech? The answer is obvious: you can offer products and services, and acquire clients without having them on-site, that is, without having to appear at a bank or go to a certain physical location. However, only a small percentage of the market knows what a Fintech is, and these clients always fall back on the opportunities that traditional banks can offer them. The Fintech industry, in this period of COVID-19, will need to go through an era of education and drive to generate awareness and exposure among its potential users, to stop being a “nice to have” and finally become a reality. The Fintechs, without question, are here to stay.

The path, in the Latin American market, will be to digitize those “not digitized” and will possibly mark a trend for banks: to offer digital accounts with no monthly maintenance cost (as many Fintech companies do today) to unbanked clients. From this financial inclusion, these users would have easier access to funds from Coronavirus donations.

With the rise of open banking, Fintechs will focus on partnering with traditional banks or other entities to help them in the digitization process, empowering banks to move from an in-person model to a digital model. In the case of risk management, the trend will also be for Fintechs to help Latin American financial institutions on the path and process towards digitization. The Coronavirus will undoubtedly generate an increase in the use of digital technology in the Latin American market, and banking from home will be more useful than ever.

From a financial standpoint, technology will allow financial institutions to offer and market products in an agile and effective way. From a business perspective it will contribute to the “digitalization journey” and the growth of Fintech businesses and other financial institutions. But, perhaps the biggest motivator for taking the digital journey is that financial services organizations can better support clients through difficult times, like the current period of upheaval that Latin America and the rest of the world are going through. It is essential to have software focused on instant risk decisioning that can make it possible to grant any type of financing/credit in real-time, so that customers can access funds quickly.

The operationalization of risk models will also become a fundamental element in successful digitization, especially as financial services businesses expand their use of non-traditional data. These data sources feed innovative risk models that allow more advanced and accurate risk assessments to be made when authorizing payments or making credit approvals, without the support of traditional data, such as credit bureau scores.

The current Coronavirus crisis presents an opportunity to embark on the kind of innovation that the Fintech ecosystem in Latin America needs and, of course, to publicize what these companies offer. Right now, remote work and the possibility of working from home are changing the routine and the way we operate in our daily life. Digital and, therefore, technology will become a fundamental resource for our businesses, increasing both the reliance and the value technology solutions bring.

What is a decision engine and how does it help your business processes?