Improving Loan Evaluation with Real-Time Income Detection

by Edge Insights

In the world of lending, making sound decisions is paramount. A borrower's income is a critical factor in assessing their creditworthiness and ability to repay a loan. Lenders require effective tools to evaluate this key aspect of every loan application. Enter EdgeIncome, a solution that empowers lenders to make informed decisions while streamlining their operations.

The Significance of Precise Income Assessment

For lenders serving consumers where credit reports and scores fall short, understanding a borrower's income isn't just important – it's absolutely essential. Traditional lending procedures often rely on income verification, usually carried out through the manual submission and review of pay stubs. This approach is time-consuming, susceptible to potential fraud, and prone to human error.

In contrast, EdgeIncome utilizes Instant Bank Verification (IBV) technology to provide a more efficient, secure, and accurate method for assessing a borrower's net income. IBV retrieves data directly from the borrower's bank account, reducing the chance of manipulation. This real-time data retrieval speeds up the application process, minimizing potential drop-offs caused by the friction of manual submissions. As a result, industry studies have shown approvals increase as much as 20-30% with the introduction of digital income verification.

Harnessing Advanced Machine Learning and Pattern Recognition

Deciphering income from raw bank transaction data is a complex task. Data formats vary widely, and memo lines can seem like cryptic puzzles. Moreover, not all deposits are straightforward and easily identified as underwritable income – consider a bartender who makes semi-regular weekly cash deposits to an ATM.

Many platforms wouldn’t categorize such deposits as income, but Edge will do so if there is a reliably repeated pattern. Edge has dedicated years to optimizing a sophisticated system built and optimized with advanced machine learning algorithms and pattern recognition techniques for effective cleansing, standardization, and categorization of bank transactions.

Our expertise equips lenders with actionable insights faster and more accurately than a human reviewer ever could. Understanding the patterns of income deposits also enables Edge to identify when income is missed due to changes in employment status. This real-time evaluation capability is simply not achievable using manual paystubs and traditional bureau scores based on tradeline payment history.

Embracing Automation

By accurately identifying borrower income then translating insights into decision-ready attributes, EdgeIncome opens the door to rules-based automated underwriting which reduces the need for human intervention. This enables lenders to cut operating costs and accelerate the expansion of more profitable portfolios.

Additionally, expanded income insights from the EdgeEnrich attribute library can automate other lending processes, such as optimizing repayment dates. Future Pay attributes predict the dates and amounts of a borrower’s next expected income deposits and provide stability metrics that allow lenders to anticipate variations in income. This predictive insight enhances efficiency and helps ensure compliance with NACHA re-presentment rules.

Effortless Data Processing

The versatility of EdgeEnrich extends to our platform’s data processing capabilities where a hassle-free experience for lenders encompasses all of:

• Data processed directly from a bank or credit union core
• Aggregation partners covering nearly every checking and savings account in the U.S. accessed through EdgeConnect
• Integration with a lender's existing aggregator relationship

Delivered through this platform, EdgeIncome shines as an invaluable tool for the ever-evolving landscape of personal lending. Our solution equips lenders with accurate, efficient, and secure income assessment capabilities.

With IBV integration, advanced machine learning, and real-time insights, EdgeIncome and the broader EdgeEnrich attributes suite empower lenders to make more informed lending decisions while optimizing their operational workflows. Notably, Edge is already seamlessly integrated with many leading loan origination platforms, making the transition as simple as flipping a switch.