How Data Science Can Help With Lending

How Data Science Can Help With Lending


Fintech companies are taking on the roles that banks and credit unions have traditionally had, and one of the most significant roles is lending. Many different types of consumers look to borrow money for different reasons. Entrepreneurs, newlyweds and college students are just a few groups of people that can use some short-term purchasing power. At first, fintech companies were limited in what they could offer their clients. However, the onset of data science is providing more opportunities to businesses and consumers alike. Firms such as Cane Bay Partners are helping entrepreneurs offer new solutions to their clients with stellar analysis and interpretation. Data science is now helping startups offer a variety of loan options to their clientele.

Small Business Loans

Loans can be very helpful for expanding a business or starting a new enterprise. Traditionally, a business owner would have to fill out arduous paperwork for the Small Business Administration to review. The process would often take a long time and deter an entrepreneur from getting the right assistance. Now, data scientists are analyzing the market to help fintech companies offer easier options. Equipment financing, invoice factoring and term loans are just a few things that many tech companies provide.

Home-Equity Loans

Many homeowners benefit from their property’s equity by borrowing against it. Home-equity loans have become very popular due to the low-interest rates they often come with. However, unpredictable collateral often deters people from taking home-equity loans, as people fear that they will default and lose their house. With a reputable team of data scientists on hand, a fintech company can give homeowners insights on the real estate market, as well as the economy in general, so they can see where their home values might go. The right consultation can bolster confidence and bring in more borrowers.

Credit Card

Like traditional bank cards, fintech credit cards essentially give a small loan to a consumer when he or she makes a purchase. People have been benefiting from credit cards for a long time since their revolving debt options make transactions more convenient. A data scientist can help fintech companies set up the most advantageous interest rates to maximize profits while retaining customer loyalty.

Personal Loans

Personal loans are provided by most banks, as many individuals need financial help for general daily living. Many fintech companies have capitalized by providing online personal loans. The problem with this type of loan is that many consumers shy away due to high rates. Some borrowers would rather put up collateral than pay a lot of money for an unsecured loan. A qualified analyst can help fintech companies set up the best rates based on consumer spending. A company can also benefit by hiring a data scientist to talk with prospective clients about how much they should borrow. The risk that is associated with personal loans can be avoided with proper guidance. Data scientists can help fintech companies with reviewing applicants, making offers and providing consultations. Skill and expertise can make clients feel better about their activities and come back for more help.


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