GDS Link has a deep partner ecosystem. With more than 200 sources of data available within our software, we drive innovation to power data, decisioning and analytics. Read on to learn how Powerlytics helps accelerate lending with their True Income solution.
Powerlytics Unleashes a Significant Revenue Stream for Credit Card Issuers
The Challenge
A leading credit card issuer was seeking to expand its highly profitable proactive credit line increase (PCLI) program. Regulatory requirements dictate that prior to proactively increasing a credit line, the card issuer must get the cardholder’s stated income in order to determine their ability to pay. While stated income is typically provided during the application process, it needs to be updated after 12 months which is invasive and very difficult to achieve via customer communication channels.
The card issuer was seeking an alternative income source that would cover a large portion of its cardholders, meet regulatory standards and its own risk requirements, and would not add any customer friction.
The Solution
Powerlytics True Income which leverages a proprietary database of the tax returns of over 150M US households was the ideal solution. It not only covered all of the card issuer’s cardholders but could provide highly accurate household income estimates and score a customer’s stated income with zero customer friction.
Moreover, the Office of the Comptroller of the Currency (OCC) had reviewed the solution and allowed commercial usage for line increases and other use cases including prospect targeting and getting to a “yes” in a loan decisioning process.
To evaluate the True Income solution, the card issuer and Powerlytics collaborated on a blind test against verified income to validate that Powerlytics income estimates met the issuer’s strict risk guidelines. The blind test proved successful and the issuer then moved into a production environment that validated that the credit quality of PCLIs from Powerlytics income estimates either improved or stayed consistent with the quality of PCLIs from stated income as follows.
- Powerlytics showed similar or better sales lift by credit grade to that of self-reported income (SRI) and other income sources
- 30+ and 90+ delinquency rates for Powerlytics CLI’s were in line or better with all other income sources
The Impact
The credit card issuer entered into a multi-year contract with Powerlytics that enabled it to evaluate over 10Ms incremental cardholders annually for PCLIs. By implementing Powerlytics True Income to grow profitable PCLIs, the credit card issuer could improve its annual financial contribution by over $15 per cardholder resulting an incremental financial contribution per 10M PCLIs of $155.4M (see chart below).
Driving Innovation In Lending
Through this partnership, GDS Link and Powerlytics drive innovation in lending. GDS Link provides solutions, analytics, and advisory services to to help lenders lend more, profit more, and risk less all while delivering an end-to-end digital loan experience. Learn more about our solutions here or request a demo below to get started.
