![]() ![]() IT's role in converting financial information from "soft" to "hard" data that can be precisely disseminated at a very low cost is a development that has altered the provision of consumer credit from the traditional bank-based model-where approving, funding, and servicing loans are tasks integrated within the same firm-to one where different firms can specialize in originating or funding loans along a credit supply chain. ![]() Before this information technology (IT) revolution, loan officers, often at banks, would gather "soft" information about a potential borrower through direct interactions with the applicant, but by the mid-1990s this was largely replaced by credit bureau data, assembled primarily from digitized "hard" information about an individual's repayment history. Over the past 25 years, the retail lending market has undergone marked changes, many of which have been enabled by technological advances which have transformed the way that information is collected and analyzed to make decisions on consumer loans.
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