Alternative data steadily building momentum in lending

International Data Corporation estimates that the global artificial intelligence (AI) market (including software, hardware and services) will grow 16% y/y to USD327bn in 2021 and USD500bn by 2024. Fintech lenders now have an edge over traditional lenders in using alternative credit data with AI to offer products to thin-file customers. As digital transformation is adopted, traditional lenders will use alternative data in credit underwriting. The role of underwriters would change considerably, requiring them to understand and interpret how alternative credit data impacts risk parameters. This paper highlights the following:

Key Takeaways

- Alternative credit data in relation to the four C’s of credit.
- Factors impacting effective adoption of alternative credit data.
- Approaches to machine learning that can be used to model credit risk from alternative data.
- Regulators’ views on the use of alternative credit data.
- Our views on the next-gen underwriting process.

Subhrojyoti Mandal

Subhrojyoti Mandal

Head, Pune Delivery Centre.

Subhrojyoti is a Director and has been with Acuity Knowledge Partners for over 11 years and has more than 18 years of experience driving lending, credit transformation, and solution delivery to clients. Leveraging his people, process, and financial technology experience, he has been instrumental in onboarding numerous clients for Acuity in Lending Services.

Currently, he leads Acuity Pune centre and is responsible for a team of over 60 employees.

He joined Acuity in 2011 as Vice President Investment Research and managed service delivery for several buyside, sell side and wealth management clients within the credit research space. Subhrojyoti was one of the founding members of the Lending Services business in 2013 with one client. Since then, he has helped drive business growth for Lending Services to reach more than 750 FTEs and 35 clients.

Prior to joining Acuity, from 2005 to 2011, Subhrojyoti worked with..Show More

Alternative data steadily building momentum in lending

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