EXL, a leading data analytics and digital operations and solutions, Corridor Platforms, a leading decision workflow automation platform, and Oliver Wyman, a premier global management consultancy, have announced a joint venture to develop a risk decisioning-as-a-service solution for financial institutions. The breakthrough new solution leverages advanced analytics, AI and the cloud to deliver instant credit decisions necessary to support digital lending initiatives such as point-of-sale financing, digital loans, mortgage approvals and real-time credit limit changes.

The rapid-fire growth of digital lending has put mid-sized and regional banks at a significant disadvantage versus national players with the tech infrastructure in place to support real-time decisioning. With this new decisioning-as-a-service solution, banks and credit unions of every type will now be able to take advantage of a hosted advanced decisioning cloud populated with external and internal data sources and a dedicated team of industry experts, while maintaining full control of compliance and governance. This will enable them to become competitive immediately versus the most advanced lenders.

“As digital lending products have proliferated, the customer expectation for instant approval on everything from a buy now, pay later offer to an online mortgage application has put enormous pressure on lenders to automate their credit risk decisioning processes,” said Ash Gupta, Chairman of Corridor Platforms and former Chief Risk Officer of American Express. “While speed is clearly the goal, it cannot come at the expense of robust risk controls. With our risk decisioning as a service solution, we’re giving lenders a turnkey solution to deliver real-time credit decisions with the risk governance necessary to meet their fiduciary requirements.”

Smaller banks have found it prohibitively expensive to invest in big data technologies and attract top AI/ML talent to complete effectively. Some banks have started using generic vendor scores for decisioning, but as most products become digital, this strategy could leave them at a permanent competitive disadvantage versus real-time, hyper-personalized models and decisioning strategies. Decisioning is a core function and banks need to make a transformational leap to meet growing digital expectations from consumers. While most solution providers use black box models, this industry-first offering is truly a build, operate, transfer solution. It will allow banks to learn on the job from industry experts, as they modernize/automate the decisioning process, with immediate performance gains as a proof point.

“When it comes to lending, current consumer expectations are that they get to choose between relevant offers from multiple sources and receive real-time answers. Regional banks and Credit Unions, used to a loyal and captive base, are dealing with acceptance rates that have fallen sharply in recent months. To be relevant, banks need to transform their data/analytics infrastructure and uplift modelling talent quickly,” said Vikram Pandit, Chairman of EXL and former Chief Executive Officer of Citigroup. “With this new offering, we’re bringing the collective power of the industry’s leading technology, analytics and governance experts together to create a solution that will make lenders competitive quickly, while transferring critical know-how so that they become self-dependent in the long run.”

Capturing a wide range of traditional credit risk measures, including credit scores, purchase and payment histories and bank statement data, along with non-traditional data, real-time fraud screening and risk rating tools based on data generated from each new transaction, the risk decisioning-as-a-service solution is designed to address the unique challenges of digital lending.

“Lenders offering real-time digital credit products need to get comfortable moving beyond traditional credit data and scoring by adopting AI-enabled software that learns from all relevant data and builds proprietary risk scoring in real-time. But they need to do so with full compliance and robust governance,” said Til Schuermann, Co-Head of Oliver Wyman’s Finance, Risk and Public Policy practice and Board member of Corridor Platforms. “Oliver Wyman is thrilled to collaborate with Corridor and EXL to provide analytics, risk management and regulatory expertise and guidance as they stand up this industry-first offering.”

Both EXL and Oliver Wyman have a long history of working together with Corridor to support client needs and both companies have a minority stake in Corridor.