A new solution has launched to support lenders managing collection risk from Covid state-backed loan schemes.
Data provider mnAI has partnered with business advisory firm Grant Thornton on the new product, which will use the former’s technology and proprietary data and the latter’s data strategy, data management and analytics.
The firms said that the combined service will provide clients with insights into UK businesses and help reduce risk.
According to the British Business Bank, 1,670,939 loans worth £79.3bn have been delivered through the coronavirus business interruption loan scheme (CBILS), bounce back loan scheme (BBLS) and coronavirus large business interruption loan scheme.
mnAI and Grant Thornton cited figures from Experian that showed that loan fraud rates increased by 40 per cent in the second quarter of the year and in December last year, a public accounts committee report anticipated that losses from fraud and credit risk could reach somewhere between £15bn and £26bn.
Niresh Rajah, managing director, head of data, regtech and digital assurance practice, financial service group at Grant Thornton, said despite government intervention during Covid through schemes such as CBILS and BBLS, some businesses will not recover, leading to a rise in defaults.
“Collections and recoveries require specialist skill sets, and lenders will be under pressure to meet demand, while actively preventing fraud and making sure they are treating customers fairly,” said Rajah.
“Whilst the full exposure of the high street banks has not yet been quantified, the risk posed by those customers likely to default is significant, especially where background data on new customers (e.g., various debt exposure, longevity of relationship with the lender) is not known.
“Consequently, lenders are seeking to quantify this risk, whilst developing innovative solutions to mitigate and manage their exposure.
“Our exciting collaboration with mnAI combines our expertise and capabilities in data management and data analytics to help our clients address these challenges.
“We are also working together on a number of use cases to support clients to manage risk, combat financial crime and fraud, and to help them to better understand their end customers and make insightful, data-driven decisions for revenue growth and better customer service.”
“Using billions of data points, mnAI’s award-winning technology instantly provides uniquely accessible insight for research and due diligence on all unlisted companies in the UK, across sectors, companies, geographies and individuals,” said John Cushing, chief executive at mnAI.
“From financial crime to real-time gender analysis, our data and technology is helping to power the next generation of business intelligence.
“The collaboration with Grant Thornton and the opportunity to share our expertise across a range of industries and sectors is hugely exciting.”