An unprecedented study conducted by Serasa Experian, Brazil’s first and largest datatech, showed that fintechs can safely expand their credit granting by up to R$4 million on average per fintech through a denied credit recovery model, meaning reassessing new clients who were initially denied credit but may be eligible with a complementary analysis. The study was conducted based on fintech portfolios simulating a second level of complementary analysis in the credit policy.
In percentages, the average amount of R$4 million represents a 20% increase in approvals for each Fintech through an analysis that considers criteria about the borrower not included in the initial assessment, such as Score variation trends, payment punctuality history, and debt severity levels. Considering, for example, that 1/3 of the population has low-severity debts according to Serasa’s restricted database, this more accurate analysis becomes even more important, as the lender may be denying a low-risk client.
For Fernando Galbiatti, B2B Offers Director at Serasa Experian, this second look at previously denied clients is essential for Fintechs to increase revenue without additional acquisition costs—since the client has already approached the company—while maintaining the expected delinquency rate in their credit policy. ‘With denied credit recovery, a Fintech that currently approves 25 out of 100 credit applications, for example, could approve nearly 30 in a second analysis, thereby gaining more competitiveness by not letting these clients go to competitors.’
This credit expansion does not impact delinquency rates, as it already accounts for the risk percentage managed by each fintech. Thus, denied credit recovery allows for increased gains without compromising operational security.
Additionally, adopting a second analysis also brings direct benefits to consumers who were initially denied credit. By being evaluated more thoroughly and subsequently approved, they no longer need to seek other lenders or potentially accept higher interest rates.
‘By zooming in on consumers initially denied credit under the lender’s policy, we can, using intelligence from complementary information, recover clients with credit consumption potential without increasing delinquency. For example, a consumer may lack minimal information for credit access, but their CPF may be linked to an MEI (Individual Microentrepreneur) they co-own, generating recurring revenue. This is one of many profiles detectable upon reanalyzing rejected CPFs. This strategy can be highly valuable, especially for fintechs, as it allows testing hypotheses, adopting a more aggressive approach for seasonal trends, or gradual expansion without altering the current credit policy,’ explains Fernando Galbiatti.
The numbers result from a study using the integrated Denied Credit Recovery solution, based on Fintech case studies.
The analysis is conducted through a strategic and individualized assessment of the provided database, combining exclusive and market data with analytical intelligence capabilities, enabling a broad view of client potential by CPF and/or CNPJ. The solution identifies the audience with the highest recovery potential without increasing the Fintech’s risk exposure. The study was also conducted in other segments, such as banks and financial institutions, where a significant increase in final approval rates was observed.
