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Returning to Growth Using Manual Underwriting

As a risk management consulting firm, we’ve had the opportunity to assist clients who are focused on enhancing and establishing manual underwriting departments to identify profitable new customers that aren’t being handled effectively within the systemic decisioning processes. This white paper outlines some of the strategies we have helped implement to use manual underwriting to increase profitability.

Systemic and Manual Working Together

As you assess the benefits of using manual underwriting, it is important to first consider systemic decisioning and the benefits and shortcomings it brings. While it adds speed and consistency for straightforward decisions, it can hinder profitability and add risk for any grey-area applicants. Some considerations:

  • Statistical outliers can cause automated decisions to take on excessive risk or miss potential profits. Inaccurate data can lead to a poor credit decision.
  • Systemic decisions can rely too heavily on credit score, and not factor in an applicant’s complete underwriting story.

Manual decision making can supplement a systemic underwriting process and take advantage of every profitable loan opportunity by:

  • Pinpointing inaccuracies in applicant data and considering outlier statistics.
  • Finding additional information through application development calls, and making more educated decisions.
  • Building a more complete story which helps identify credit-worthy applications on the decline path and non-credit-worthy applicants on the approval path.
  • Providing feedback to the systemic underwriting process, thus refining underwriting criteria and optimizing systemic decisions.

In both strong and challenging economic times it is important to think about how a manual underwriting system can increase the profitability and credit risk management across credit portfolios. Read the full Bridgeforce white paper for more details on how to supplement your systemic decisioning processes with a manual underwriting program.

Category: Credit