Credit Decision Engine - The Power of Integration Partners

Credit decision engines have been around for a while. They come with all shapes and sizes. Some are overbuilt and very expensive to operate and some can’t solve some common last mile issues that require their clients to spend more time and money to integrate the credit decision engine with the rest of their enterprise software.

What is a Credit Decision Engine?

A credit decision engine is the heartbeat of your business. It is a software to execute a set of logic for your business to make quick and automated decisions. The benefit of having a credit decision engine is that it’s consistent, always perfectly follow your instructions and its decisions aren’t influenced by any other external factors that could cause compliance issues.

Who uses a Credit Decision Engine?

Banks are the primary users of credit decision engines. They are making millions of decisions a day whether it's to process a payment or open up a checking account. To scale their business, they must have a credit decision engine to process decisions simultaneously, consistently at scale.

Whether the bank is offering a DDA account, credit card, savings account, mortgages, auto loans or home improvement loans, they all need some form of credit decisioning for pre-approval or a full approval.

Sometimes, credit unions and financial institutions use decision engines to make similar identity verification and credit decisions as well. In order to expand their membership and cross-sell credit products, they need a decision engine to make some of these complex decisions using internal and external data.

FinTechs and other non-bank lenders heavily rely on credit decision engines. These firms are staff light and they depend on data collected from their digital onboarding system and third party data providers to produce a credit decision and present offers to their customers.

How do I use a credit decision engine?

Many credit decision engines are difficult and sometimes daunting to use. Often, it feels like the software might require someone with a mathematical degree to operate the vast array of over engineered functionalities. Or software engineers might have to be involved to plug in certain data sets to make these credit decisions to work.

Worse, users might have to hire an entire team just to upkeep the input and output of outdated credit decision engines to maintain its basic functionality.

Modern decision engines should have a graphical user interface, a testing module to test all the rules and the decision trees should link to the rest of the enterprise systems and most importantly other integration partners. We will address this important aspect of the modern credit decision engine below.

What are integration partners?

Integration partners come with two flavors, third party data providers and other large enterprise systems such as a loan management system, bank core, credit card management systems or other CRM (customer relationship management) systems.

Let’s talk about the third party data providers. They are the most important aspect of making consistent and accurate decisions. For instance, if you are working with a credit bureau in the United States such as TransUnion, your decision engine should be connected with their services already. Also, the decision engine should have all of the attributes from their products made available through a variable library that’s ready to be used to start your decision tree building process.

If your decision engine either can’t integrate with third party data providers or costs additional fees for these integrations, please explore other options. Any modern decision engine should have the most common third party data providers already integrated. If they don’t, they shouldn’t be charging clients to make these integrations happen.

So if you are picking a decision engine, please make sure that the data integration partners that you want for your identity as well as your credit strategy are already implemented and connected to the credit decision engine. If they aren’t available make sure that you don’t pay for the integration and the decision engine company needs to do this free of charge.

The other types of integration partners are other enterprise systems such as bank core, card management system or a loan management system.

The decision engine must also be connected with these systems. Just like the third party data providers, if your bank account, card or loan servicing platform is not connected, don’t pay for the integration, your decision engine provider must do this free of charge. Otherwise, you will not only overrun on time, you will also blow through your budget.

Picking a credit decision engine is important, but nothing more important than having the credit decision engine already integrated with third party data providers as well as other enterprise systems.

What about private integration partners?

Sometimes the clients have their own homegrown CRM systems or financial product management systems. 

The credit decision engine either must complete the integration with you free of charge or they must have a set of open API (application programming interfaces) that you can adopt to in order to connect your homegrown system with the credit decision engine.

Most likely, there will be multiple API endpoints as well as webhooks to pass information back and forth between the credit decision engine as well as your own home grown system.

Your decision engine provider must be willing to work with you and extend their API or modify their endpoints free of charge to work with your enterprise system. 

Integration Partner Marketplace

If a decision engine’s already plugged into a variety of third party data providers, payment providers and enterprise management systems, it’s probably a good sign that the decision engine has grown to its full potential.

If you want to take a look at an example of a decision engine with a full fledged variable library and third party integration, head on over to this link.

A strong integration partner marketplace makes a strong ecosystem for you to choose from the best data providers with fundamental building blocks to build great underwriting rules.

About LendAPI:

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