Fintechs: A second look at rejected prospects could, on average, add R$1.74 million to a fintech's annual revenue without increasing delinquency, according to a Serasa Experian study.

A groundbreaking study by Serasa Experian, Brazil's leading datatech company, reveals that fintechs can safely increase their credit granting by up to R$4 million per fintech, on average, through a debt restructuring model. This model re-evaluates clients whose credit applications were initially rejected but who might be eligible after a supplementary analysis. The study, based on fintech portfolios, simulated a secondary, supplementary credit analysis layer.

In percentage terms, the average R$ amount of 4 million represents a 20% increase in Fintech approvals, based on an analysis incorporating credit applicant criteria not considered in the initial evaluation. These criteria include the trend of score variation, payment punctuality history, and the severity level of debts. For example, considering that 1/3 of the population has low-severity debts, according to the Serasa restrictive database, this more accurate analysis becomes even more crucial, as the lender might be rejecting a low-risk client.

For Fernando Galbiatti, Director of B2B Offers 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 foreseen in their credit policy. "With the repurposing of rejected applications, a Fintech that currently approves 25 out of every 100 credit applications, for example, can, with a second analysis, potentially approve nearly 30, and thereby gain more competitiveness, as it avoids these clients going to competitors."

This expansion of credit offerings does not impact delinquency rates, as it already takes into account the risk percentage already considered by each fintech. Consequently, the resubmission of declined applications allows for increased earnings without compromising operational security.

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

By zooming in on consumers rejected in an initial credit policy analysis, we can, using intelligence derived from supplementary information, re-evaluate customers with potential creditworthiness without increasing delinquency. A consumer, for example, might lack the minimum information required for credit access, but their CPF (taxpayer identification number) might be linked to a sole proprietorship (MEI) of which they are a partner, generating recurring revenue. This is one example of the various profiles that can be identified when re-analyzing rejected CPFs. This strategy can be particularly appealing for fintechs, as it allows them to test hypotheses, adopt a more aggressive approach during certain seasons, or gradually expand without altering the existing credit policy," explains Fernando Galbiatti.

The numbers are the result of a study conducted using the integrated solution Repesagem de Negados, starting with Fintech cases.

The analysis is conducted through a strategic and individualized evaluation of the provided data base, combining exclusive and market data with analytical intelligence capabilities. This allows for a comprehensive view of your clients' potential, by CPF and/or CNPJ. The solution identifies the most promising candidates for debt recovery without increasing the Fintech's risk exposure. The study was also performed in other segments, such as banks and financial institutions, where a significant increase in the final approval rate was observed.