This article first appeared on the TRaiCE website
American author and former dotcom entrepreneur Seth Godin once said, “Don’t find customers for your product. Find products for your customer.” The basic premise here is that a product that is built to solve a need is far more valuable than one that is superfluous. We’re happy to report that the TRaiCE story follows this script! We saw a problem and developed TRaiCE to solve it (check out our About Us page for more details). Our team worked concertedly with professionals in the risk monitoring sector to develop features that would solve real-world problems for financiers everywhere. So, who is TRaiCE for? And how does it make life easier for them? Let’s find out.
Who is TRaiCE for?
TRaiCE is a good fit for a wide variety of financial institutions ranging from banks, credit unions, and asset management firms to alternate lenders, private equity funds, and venture funds. The platform acts as an offline assistant for credit portfolio managers, relationship managers, bank lenders, microfinance lenders, asset managers, investment managers, and bank investment teams.
Importantly, the TRaiCE team does not subscribe to the one-size-fits-all philosophy. We recognize that our users can have different needs and focus points and so have designed our solution to be flexible. TRaiCE’s parameters and outputs can be tailored to meet each user’s needs.
For example, a private equity fund may only be interested in monitoring public sentiment towards their investments. Contrastingly, enterprise institutions such as credit unions may want to include other information such as internal account data, credit bureau data, and external data in their monitoring. Since TRaiCE can handle both structured and unstructured data, it can make a customized solution for both with ease.
TRaiCE can also identify the pertinent data sources needed to achieve risk monitoring success for each customer. This customizability and flexibility means that it can scale up or down to meet your business needs. All of which makes it an equally good choice for small, medium, and large business types.
Top 4 challenges faced by financiers in 2021 and how TRaiCE helps
1. Consolidating and making sense of data
In risk monitoring, information can be your best friend or your worst enemy. Comprehensive, high-quality data can give you gap-free monitoring. Conversely, limited, and poor-quality data is bound to leave gaping holes in it. The challenge that financiers face here is twofold. First, there is no single source of credit information out there. So, financiers need to painstakingly collect relevant data from multiple different sources. Second, once all the data is collected, they then need to spend significant time organizing, merging, and analyzing it. Given that there is an astronomical amount of data available today (over 2 quintillion bytes of data are generated every day), both are not easy tasks.
How TRaiCE helps
TRaiCE does all the heavy lifting for you here. It collects all the relevant data needed to meet your credit monitoring goals. This way you have one central repository of data to work from rather than several. TRaiCE’s powerful algorithms can also process trillions of datasets, organizing and analyzing it in a matter of minutes. In other words, it extracts the right credit-monitoring insights from 2 quintillion or more bytes of noise so you can make the right business decisions with it. The end result is a risk monitoring system that leverages the power of data, making it a friend rather than a foe.
2. Streamlining risk monitoring processes
An uncertain financial environment, the uptick in delinquencies and loan defaults, and increased regulatory demands are all reasons why financiers need to expand their credit monitoring capabilities. Apart from improving their data processing abilities, financiers now must also focus on improving the accuracy with which they predict future risk and the alacrity with which they mitigate losses. Manual processes and legacy systems that offer partial automation are ill-equipped to handle this increased workload. The solution here is not to keep adding working hours or trained personnel to your risk monitoring team. Instead, the need of the hour is to switch to modern systems that can significantly streamline the process.
How TRaiCE helps
TRaiCE offers end-to-end automation that will optimize the credit monitoring process markedly. We’ve already touched upon how it takes care of time-consuming data analysis earlier. In addition to that, TRaiCE’s ability to incorporate external and other unstructured data sources along with lagging financial indicators gives it a distinct market advantage (most other current loan management systems work with only one type of data). These expanded datasets give financiers the ability to monitor across myriad data points, portfolios, departments, and market verticals, vastly improving the accuracy of their risk assessments and predictions. It also makes TRaiCE adept at spotting newer forms of risky behavior.
Furthermore, TRaiCE’s automation allows risk managers to constantly measure outcomes and incidences of false positives and negatives. This in turn can help them set accurate benchmarks that minimize the occurrence of false results, saving a ton of time, effort, and money in the process.
3. Achieving real-time monitoring
To make timely, wise decisions, risk managers need data-backed assessments and critical analysis in real-time. Traditional risk monitoring systems with their patchwork of labor and time-intensive processes constantly leave financiers behind the eight ball. The truth of the matter is that with these legacy systems, risk profiling is always a few days or weeks behind. That is a dangerous game of catch-up to play when you and your investor’s profits are on the line.
How TRaiCE helps
TRaiCE uses real-time data to produce early warning alerts for default-prone borrowers. In addition, due to its ability to scan large datasets and form connections in a flash, TRaiCE gives investors and lenders the ability to monitor their entire portfolio completely and daily. With a constantly updated borrower profile in hand, financiers can identify deviations in patterns instantaneously. This way they can stay on top of their portfolio instead of 10 steps behind. More importantly, the platform gives you the breathing space needed to initiate timely corrective measures that can mitigate your losses significantly. In short, with TRaiCE, achieving real-time monitoring can go from being a pipe dream to a tangible and welcome reality.
4. Maintaining a competitive advantage
The financial lending space is becoming a hyper-competitive one. Banks and other long-standing lenders are slowly but surely giving up their market-share monopoly to alternate lenders and smaller fintech companies. Before the 2008 recession, banks held an impressive 75% of the market share in small business loans. Over the last 10 years or so, this has dropped down to only 40%. On the one hand, as competition rises, financial institutions are facing increasing pressure to stay profitable by taking risks. On the other, they also face increased regulatory pressure to push back on these risky endeavors. So, the challenge here is for financiers to maintain the tricky balance between risk and safety while staying ahead of the competition.
How TRaiCE helps
TRaiCE can help financiers kill two birds with one stone. The fact that it can constantly monitor your portfolio on a 24/7/365 basis (even when you are sleeping and on weekends and holidays) allows you to stay on top of the game, both in terms of risk taking and risk mitigation. The system allows you to set risk guardrails that ensure you never go off track. At the very least, it sets off alarms if you do start to go off track, warning you to do an immediate course correction. That it rings many of these alarm bells well in advance is particularly advantageous when you want to up your risk game.
TRaiCE’s AI-driven technology gives more accurate and actionable results than legacy systems can. In addition, financial institutions can use the key risk and performance KPIs produced by the system for compliance submissions. So, financiers who use TRaiCE are at a competitive advantage because they get the complete and latest picture of their portfolio with a whole lot of other advantages in between.
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Conclusion
The TRaiCE platform’s value lies not just in getting rid of repetitive, inefficient manual processes from your credit monitoring strategy. It supplements this by helping you find a fundamentally better way to monitor your credit portfolio. This TRaiCE-backed superior methodology allows better, faster, and more accurate decision-making that can give you optimal results. So, if you are a financier facing any of the challenges described above, then give TRaiCE a try. It could be the answer you’ve been looking for all along.
