VIDEO PRESENTATION SPONSORED BY WHITE CLARKE GROUP
Dr Paul Russell, director of analytics at Experian explains how big data can reduce auto finance delinquencies
In this video presentation sponsored by White Clarke Group, Dr Paul Russell, director of analytics at Experian UK&I, examines how the application of big data to predictive analytics can be used to help reduce the rise of delinquencies in auto finance agreements – and to comply with new regulatory pressures.
There has been a 150% growth in UK vehicle finance lending in the last six years and in the captive new vehicle sector alone lending balances grew from £2 billion in Q1 2012 to £3.1 billion in Q1 2014. At the same time auto finance delinquencies dropped from 4% in June 2010 to 0.7% in June 2014.
However, while incomes have not grown much over the last few years, interest rate rises are “just around the corner” and inevitably some borrowers are going to get squeezed. Prudent auto lenders therefore will inevitably need to capture the right data up front to make a comprehensive predictive study of their portfolios.
Russell also notes that there are increasing new regulatory pressures not only to assess affordability at the point where lenders are originating customers, but to do so throughout the life of the auto finance agreement.
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