Beyond Compliance: Why Live Data Validation is Essential for Your Lending Strategy

Introduction:

When it comes to lending, data quality can make or break a business. With the increasing amount of data available to lenders, it's critical to have the ability to quickly validate data and ensure it's accurate. This is where live data validation comes into play. By continuously monitoring data for accuracy and providing real-time feedback, lenders can make more informed decisions about loan origination and underwriting, ultimately leading to better outcomes for both the borrower and the lender. In this article, we'll explore the concept of live data validation and why it's essential to go beyond compliance with legal regulations. We'll also provide a real-life example of a lending company that successfully implemented live data validation and outline steps for others to do the same. So, whether you're new to the concept of live data validation or looking to improve your existing data validation process, this article is for you!

What is Live Data Validation?

Live data validation is a process of continuously monitoring data accuracy in real-time. It involves checking data at the time of entry, before it's committed to the database. The purpose of live data validation is to ensure that data is accurate and complete, which is crucial for lending decisions. This process goes beyond traditional batch processing, where data is checked after it's already been entered into the system. The difference between the two approaches is that live data validation catches errors before they have a chance to impact the business, while batch processing may catch errors too late or not at all. The benefits of live data validation are numerous, including real-time feedback on data accuracy, which allows for immediate action, as well as reduced errors, improved efficiency, and enhanced borrower experience. 

Imagine a scenario where a lender is trying to process a loan application, and the data entered is inaccurate or incomplete. This can lead to a myriad of problems, such as denied loans, increased processing times, and ultimately, a poor borrower experience. Live data validation solves this problem by providing real-time feedback to the lender, allowing them to quickly identify and correct any errors before they become a problem. This is a game-changer for lenders who are looking to improve their lending process, reduce errors, and enhance the borrower experience. By implementing Thryv Data’s live data validation, lenders can not only meet compliance standards but also improve their decision-making process and stay ahead of the competition.

Why Compliance Alone is Not Enough

Compliance is essential for lenders to avoid legal penalties and ensure that they are following the law when it comes to data accuracy. However, compliance alone is not enough to ensure that the data is accurate and complete. Lenders need to go beyond minimum compliance standards and ensure that they are providing the best possible service to their borrowers. Relying on compliance alone can lead to inefficiencies and errors, which can harm the business in the long run. For example, incomplete or inaccurate data can lead to incorrect lending decisions, which can result in increased defaults, lost revenue, and reputational damage. The last thing lenders want is to lose the trust of their customers, who expect their personal information to be handled with care and accuracy.

The Importance of Accurate Data in Lending

Accurate data is a critical component of informed lending decisions for businesses in Australia. Inaccurate data can lead to unfair outcomes for both borrowers and lenders, impacting not only the individual but also the broader economy. For instance, if a lender relies on inaccurate data to make lending decisions, it can result in loan denials or approvals with unfavourable terms, leading to unfair outcomes for borrowers. This can cause borrowers to default on their loans, resulting in losses for the lender and damage to their reputation. Inaccurate data can also lead to inefficient and costly loan processing, impacting the lender's bottom line.

According to a recent study, data accuracy issues cost Australian businesses around $3.6 billion per year. In the lending industry, data inaccuracy can lead to significant losses, including loan defaults and damage to the lender's reputation. This illustrates the importance of accurate data in the lending industry and highlights the need for lenders to go beyond compliance standards to ensure data accuracy and completeness. Lenders need to implement processes such as live data validation to ensure accurate data and reduce the risk of negative outcomes for both borrowers and lenders.

Moula Money: Ensuring Accurate Loan Decisions

Moula Money is a fintech lender that provides small business loans to Australian businesses. The company's lending strategy is based on a fast and straightforward loan application process that utilizes an online platform to assess loan applications and provide funding within 24 hours. However, Moula Money faced challenges with inaccurate data that slowed down the loan application process and increased the risk of incorrect lending decisions. 

To address this challenge, Moula Money implemented Thryv Data’s live data validation API, which allowed them to validate data in real-time during the loan application process. By implementing live data validation, Moula Money achieved a 35% reduction in manual review time, which allowed the company to process loan applications faster and with greater accuracy. The use of live data validation also allowed Moula Money to improve customer satisfaction, reduce the risk of incorrect lending decisions and ensure compliance with regulatory requirements. Overall, the successful implementation of live data validation has allowed Moula Money to streamline its loan application process and deliver better outcomes for its customers.

How to Implement Live Data Validation

Implementing Thryv Data’s live data validation API can be a smooth process with the right approach and resources, companies can achieve success. Here are some key steps and tips to keep in mind:

• Assess your data needs and identify the data that needs validation.

• Consider the type of data validation that is best suited to your needs.

• Identify the right tools and technologies to implement live data validation, such as Thryv Data’s API-based validation services.

• Work with our data experts and invest in robust data security measures to overcome potential challenges.

• Leverage resources such as industry best practices, online forums, and vendor resources to guide you through the live data validation process.

By following these steps and utilizing these resources, companies can successfully implement live data validation and improve the accuracy and speed of their lending decisions.

Conclusion

In conclusion, accurate data is critical to lending decisions and live data validation is essential to ensure that data is both accurate and up-to-date. Compliance alone is not enough to guarantee accuracy and relying on compliance standards alone can lead to errors and inefficiencies. Implementing live data validation can improve lending outcomes, reduce errors, and improve customer experiences. Therefore, it is important for companies to prioritize accurate data in their lending strategies and to consider implementing live data validation to achieve these goals. By doing so, companies can make better lending decisions, reduce risk, and ultimately provide better outcomes for both borrowers and lenders.