Top 5 Best Credit Risk Management Tools To Use In 2023 | GiniMachine (2024)

Between 2023 and 2030, the credit risk management software market is set to grow from $1,590.89 million (2023) to $4,547.84 million (2030). This puts its estimated CAGR at around 13.44%, indicating an increased interest in the technology.

According to Deloitte, over 80% of respondents to their survey on Credit risk measurement technology trends stated that they already have plans in place for transforming their risk management infrastructure. In fact, 65% even expect their investment in credit risk management tools to increase—yet, still consider that the cost is worth the value of the technology.

In the world of finance, no investment is taken lightly. That’s why before embarking on onboarding new software tools, it’s important to know what’s on the market and what these tools can realistically offer your business. Keep reading to discover the best 5 credit risk management tools today that will help you identify and mitigate risks, reduce fraud and bias, ensure compliance, and deliver much-needed innovation to your business.

Top 5 credit risk management tools in banks and fintechs in 2023

The tools of credit risk management are essential tools of the financial trade for all organizations. This type of software solution helps businesses to reduce risk while maximizing profits when lending. This year, these are the top tools to watch out for:

1. GiniMachine

One of the best credit risk management software is GiniMachine. This credit scoring software is an end-to-end solution that comprises tech that includes application scoring, collection scoring, and predictive analysis to deliver more accurate credit scoring results.

Benefits of GiniMachine:

• Highly customizable—you may have heard of the downsides of ready-to-go software, but this isn’t something you’ll find here. In its place, GiniMachine truly delivers on flexibility and allows you to add adjustable cut-offs, have unlimited credit scoring parameters, B2B and consumer lending solutions and much more.
• Data sharing—open banking and closer cooperation between providers is trending and it’s set to continue. That’s why when seeking out a technology, always look for one that includes this functionality. With GiniMachine’s data-sharing features, you can import and export data free of charge, engage with API integrations and ensure you get the most out of your software.
• Intuitive experience—what’s the use of a platform if you can’t use it, right? GiniMachine puts a huge focus on UX/UI design and prioritizes a no-code approach to software. What this means is that it’s a usable platform for anyone in the team from the tech department to management, meaning that readymade predictions are really just a click away.
• Data visualization—it’s great to have data. It helps inform decisions and guide the company. What’s better is when your credit risk management software solutions come complete with data visualization tools and dashboards that help you make the move from having data to seeing it in action.

GiniMachine is best for:

Companies seeking to level up their credit risk management tools without getting bogged down by too-technical solutions.

2. Squirro

Second on our list is Squirro—an artificial intelligence platform that utilizes the latest market insights to track and uncover credit risk changes. How does it work? Squirro believes that data is the most valuable resource, and as such, it uses AI technology to unlock the meaning behind the numbers.

Benefits of Squirro:

• Data connection—data management is a huge challenge within the business. That’s where Squirro steps in. It helps connect the CRM, social media, and other premium data sources and analyses them all in one place.
• Dashboard building—every business has metrics they work with, and it’s likely that you’re working with some KPIs (key performance indicators) right now. Squirro utilizes these and makes managing them in real-time (not after the fact) easier than ever before so you can take timely action on insights.
• Flexible deployment—variety is key nowadays, as everyone wants a solution tailored to them. In fact, personalization is no longer a nice-to-have. It’s expected. With flexible deployment, Squirro lets users access all the platform has to over whether they create on-premises, private cloud, or public cloud solutions.
• Relevancy management—are you making decisions based on the present or past? There is a saying in banking that past market behavior does not indicate the future, Squirro takes this to heart and delivers the latest, most relevant info for decision-making.

Squirro is best for:

Brands that are seeking to stay ahead of the trends and look at the bigger financial picture.

3. Actico

Aiming to streamline decision-making processes for financial companies, Actico is an AI-powered decision-making machine that tailors the creditworthiness process efficiently. Designed specifically for SME and commercial lending, this platform excels in credit models, flows and predictive credit decision-making.

Benefits of Actico:

• Data integration—as data remains king this year, it’s clear that companies will need to find new ways to integrate the latest insights into their decision-making, all the while ensuring data protection. Actico provides an ecosystem for this and allows companies to integrate internal and external sources via API modules that help get the job done.
• Scalability—like many ready-to-use solutions, Actico focuses on its scalability. Its flexible approach to this means models and workflows can adapt to suit the company’s needs at any time.
• Internal and external scorecards—by allowing users to manually configure internal rating logic or use pre-configured web-based risk, Actico delivers an increased level of tailorability that is sure to please many companies as they adapt its technology to meet their needs.
• Flexible deployment—a lot like Squirro, Actico offers a flexible model of deployment for its users. They can choose to take advantage of a private cloud or select Actico’s native cloud system, which comes complete with ongoing support.

Actico is best for:

Commercial organizations and SMEs seeking to improve their credit risk management capabilities with easy-to-use software.

4. Pega

Risk management is Pega’s bread and butter. It is an AI-based decisioning platform that helps its customers reduce risk and automate their workflows. Although many of the platform’s tools of credit risk management are targeted at banks and large financial enterprises, the company believes they have an offering suitable to every level of business.

Benefits of Pega:

• Diverse range of tools—Pega’s expansive kit includes complex solutions that cover customer case management, RPA programmable software for BPM, customer engagement, internal departments silo solutions, and real-time intelligence.
• Dynamic case management—takes care of all parts of the financial case, from anticipating changes to following the audit trail using the latest information, versioning, and keeping up with the latest governance.
• AI decision-making—Pega is specifically designed to use artificial intelligence technology to help organizations to predict outcomes—such as the likelihood of credit repayment—, make decisions and engage analytics in a meaningful way.
• Process AI functionality—allows brands to automatically detect and predict SLA breaches, avoiding them in the future (as much as possible). Additionally, it helps identify delays and service issues, giving companies the power to act quickly to resolve any issues that arise.

Pega is best for:

Focusing on ensuring end-user satisfaction, Pega is a solid piece of software for large-scale enterprises and businesses seeking to improve their solutions.

5. Experian

Last on our list of the best credit risk management software tools out there is Experian. This complex solution delivers solutions that allow companies to better manage loans and related risks with a number of tools, including fraud protection software, portfolio management solutions, analytics, and modeling, among others. Essentially, it’s a one-stop-shop for all elements of the lending process.

Benefits of Experian:

• Statistical tools—whether you’re a proponent of out-of-the-box or custom, Experian seeks to please with both versions, complete with attributes, models, and decision-making strategies based on the latest in AI and machine learning technology.
• Business intelligence features—self-service dashboards mean getting access to all the tools a company needs are easier than before. These dashboards come complete with reports, custom data sets and data visualizations, making seeing the stats you need simpler.
• Risk score tools—by utilizing traditional and non-traditional credit data—this can be expanded into FCRA data, among others—, consortium, and business activity data. Experian allows businesses to get more accurate credit risk ratings.
• Performance modeling—understanding how a loan will perform can be key to decision-making. With Experian’s software creating and comparing multiple models and methods using a variety of statistical means becomes a possibility. This empowers smarter decision-making.

Experian is best for:

Organizations with a focus on managing risk while ensuring an increase in profit.

Over 80% of respondents to the survey on Credit risk measurement technology trends stated that they already have plans in place for transforming their risk management infrastructure.

Why you might need credit risk management software

It’s obvious that if you’re operating in the financial industry you need robust credit risk management software solutions to help ensure minimal risk for your business.

However, what you may not be aware of is that recent developments in the financial world, including the influx of millennial and Gen Z consumers, mean that this task isn’t as straightforward as it was in the past. Instead, you may need to consider upgrading—80% of companies already are—to stay ahead in the financial market. So, what are the 5 best tools to look out for? Make sure your chosen solution can help you to:

• Reduce decision-making time—no one wants to wait weeks on end for a credit decision. Instead, your customers want to know as soon as possible if they’ve been approved. The latest AI-backed tools, such as decision-making features, allow companies to assess the risk of a particular client almost instantaneously to give answers quickly and improve customer satisfaction.
• Eliminate biases and human errors—inherent biases are common in the world of finance, even when they shouldn’t be. The right AI solutions can help reduce this if designed correctly and given the right data. That’s why you should always look to test your solution before putting it into action.
• Make predictions on credit risk changes—life isn’t stagnant for your business, nor is it for your clients. Things can change and quickly, with the pandemic being a key example of this. Having the right technology on hand that analyzes changes to your clients’ credit risk is essential in being proactive and counteracting problems before they happen.
• Prevent losses and NPLs—it’s no surprise that this is a top priority for any lending software, and so it should be. Many companies continue to use outdated software and datasets to measure risk and prevent losses—don’t be one of them. Instead, choose state-of-the-tools that will allow you to keep on top of your loan portfolio and ensure it performs as expected.
• Lower operational costs or optimize them—how much are you currently spending on risk management and how much is it really costing you? Especially when it comes to NLPs. Updating your toolkit may seem costly now, but in the long run it will help to optimize your business and ensure its long-term profitability.

If in doubt, reach out. The team at GiniMachine are always on hand to help you build the best solution for your business.

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