Fintechs: A second look at rejected prospects could, on average, generate an extra R$1.4 million in annual revenue for a fintech, without increasing delinquency, according to a Serasa Experian study.

A groundbreaking study by Serasa Experian, Brazil's leading data technology company, revealed that fintechs could safely expand their credit granting by up to R$4 million per fintech, on average, through a debt restructuring model. This involves re-evaluating clients whose credit applications were initially rejected, but who might qualify with a supplementary analysis. The study was conducted on a portfolio of fintechs, simulating a second level of complementary credit analysis.

In percentage terms, the R$ 4 million average amount represents a 20% increase in approvals for each Fintech, based on an analysis incorporating credit applicant criteria not considered in the initial assessment. These criteria include scoring trend, payment history, and debt severity. For example, considering that 1/3 of the population has low-severity debt, according to the Serasa credit reporting database, this more precise analysis becomes even more important, as a lender might be rejecting a low-risk client.

For Fernando Galbiatti, Director of B2B Offerings at Serasa Experian, this second look at previously rejected clients is essential for Fintechs to increase revenue without additional acquisition costs – since the client has already reached the company – and maintain the level of delinquency anticipated in their credit policy. "With the re-evaluation of rejected applications, a Fintech that currently approves 25 out of every 100 credit applications, for example, could, upon a second analysis, begin approving nearly 30, thereby increasing its competitiveness by preventing these clients from going to the competition."

This expansion of credit offerings does not impact default rates, as it already considers the risk percentage already factored in by each fintech. This allows for the resubmission of previously rejected applications, increasing earnings without compromising operational safety.

Furthermore, adopting the second analysis also brings direct benefits to the consumer who, initially, might have had their credit denied. By being assessed with greater depth and thus approved, they no longer need to seek other lenders or potentially accept higher interest rates.

By zooming in on consumers denied credit in a preliminary creditor assessment, we can, using insights from supplementary information, re-engage clients with credit potential without increasing delinquency. For example, a consumer might lack the minimum information required for credit access, but their CPF (taxpayer ID) could be linked to a sole proprietorship (MEI) in which they are a partner, generating recurring revenue. This is one example of the many profiles that can be identified when re-evaluating rejected CPFs. This strategy can be particularly valuable for fintechs, as it allows them to test hypotheses, adopt a more aggressive strategy during specific periods, or gradually expand without altering the existing credit policy," explains Fernando Galbiatti.

The numbers are the result of a study conducted using the integrated Repesagem de Negados solution, starting with fintech case studies.

The analysis is performed through a strategic and individualized evaluation of the provided base, combining exclusive and market data with analytical intelligence capabilities. This allows for a comprehensive view of the potential of your clients, by CPF and/or CNPJ. The solution allows identification of the segment with the highest potential for rehabilitation 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 the final approval rate was observed.