PLYMOUTH, Minn.—OnApproach, a provider of Big Data and analytics solutions to credit unions, has released a whitepaper detailing how the combination of vintage and loan-level models offer new insights to the world of Retail Lending Analytics.
The whitepaper, titled "Predicting and Pricing for Risk: Vintage Loan-Level Models" is based on an interview conducted with Dr. Joe Breeden, Chief Data Scientist at Deep Future Analytics. In the whitepaper, Dr. Breeden discusses the importance of Big Data & Analytics at credit unions with an emphasis on Predictive Analytics for risk-based loan pricing. Dr. Breeden discusses the changing perspective of retail lending which includes the reconsideration of the FICO score, viewing it more as a component of risk analysis instead of a method for risk analysis.
"People are recognizing that a score doesn't get you there, not by itself. So having a sound vintage modeling approach as your starting point is essential," Breeden said, "I have been building what you might call loan-level vintage models, combining vintage and scoring, and those have also been very well-reviewed. So my expectation is that as they become more widely adopted and more thoroughly studied, I hope to see those [models] become the future best practice."