Power BI has long been used to transform raw data into meaningful insights to support business decisions. It can help commercial lenders and banks better manage their credit risk by providing visual representations of these risks in the form of reports to enable deeper analysis. Power BI can also help lenders better understand their markets and customers by leveraging these analytics capabilities.
Power BI can help mortgage lenders gain greater visibility into their business operations as well so that inefficiencies can be properly addressed before they spiral out of control. In this way, Power BI can help businesses achieve their goals as the presentation and analysis of information is key to supporting tactical and strategic decisions that will impact profitability and revenues. There are many ways in which Power BI will impact the mortgage industry in years to come. Here are a few notable ones that deserve to be mentioned:
Improve Credit Risk Assessments
Power BI can provide the insights it gleans from big data to lenders so that they can learn more about their borrowers, especially those with limited credit histories. Borrowers who have not tapped into enough credit to be given a credit score can still be evaluated for a mortgage loan. For instance, millennials who do not use credit cards, take out car loans, or work as salaried employees may, at first glance, not be eligible for a mortgage. However, since they pay cell phone bills, use mobile payment apps, and have bank accounts – they can still be vetted. All this financial information can still be used to help lenders decide whether the borrower is a good credit risk or not. Power BI can also give lenders the ability to collate qualitative information, financial data, and monitor risk profiles on dashboards to accurately assess whether a certain borrower is likely to default on their payments or not.
Help Detect Fraud
With Power BI, lenders can stay abreast of fraudulent activities, given how the mortgage industry is the most frequently targeted sector in the financial services industry. Between losing out on legitimate business and getting blacklisted by regulators for rejecting applications aggressively, lenders have a lot to deal with. Fortunately, Power BI can help in balancing these competing goals. Instead of relying on manual processes and siloed data to distinguish actual fraud from just suspicious activity, Power BI can help lenders identify questionable transactions in real-time using powerful data analytics and visually stimulating dashboards. Lenders can then easily score their credit risk against hundreds of other variables to determine whether the activity being monitored is fraudulent in nature or not, as well as evaluate how sound their credit decision is.
Managing compliance risk can be a massive undertaking due to the complicated mortgage lending regulations and financing programs the government established after the 2008 financial crisis. With the help of Power BI, lenders can integrate different models and systems that were previously siloed in different departments to speed up reporting. Power BI can also be used to upgrade a lender’s reporting quality by providing interactive visualizations and insights so that decision-makers can visually analyze business information prior to making any decisions. Lenders can also more accurately predict compliance issues before regulators point them out by leveraging machine learning models.
These models can process massive volumes of data in real-time to deliver important insights into mortgage compliance issues. They can also test credit portfolios against a wide range of compliance criteria to determine where there have been breaches in compliance and correct them prior to incurring expensive penalties from regulators. Power BI can then prove to be useful for lenders as it helps them look at compliance and regulatory issues in a whole new light.
Power BI has long been used to find insights within an organization’s data. It can be used to help lenders and banks better manage their credit risks, understand their customers and markets, and provide visibility into their day-to-day operations and efficiencies. From enhanced regulatory compliance and more accurate fraud detection to improved risk assessments, Power BI is set to revolutionize the mortgage industry in more ways than one.
FlatworldEdge has long been in the business of helping organizations in the mortgage industry generate powerful analytics reports and rich interactive dashboards to boost their revenues and support more intelligent business decisions. If you need assistance to get your Power BI solution up and running in no time, look to FlatworldEdge to help you make that vision a reality.