McKinsey's recent report challenges banks to ‘reimagine lending to small and medium-size enterprises’.
We spell out the challenges we faced and addressed as SME lenders, why the technology we were using fell short of our ambitions, and how we combined data science, domain expertise and high-quality engineering to make good on them.
Credit professionals need to manage the loss of historical data’s predictive power, and to adapt to new business models and customer behaviours.
Cashflow financing to SMEs, however, is widely underserved. Abel aims to change that.
A proactive approach could reduce losses and costs by up to 20%. Even if the change in approach were cost and income neutral at face value, there is a huge conduct and human argument for undertaking it.
The next step for lenders who wish to monitor, manage, and mitigate transition risk is embedding climate risk in day-to-day activity for lending, monitoring, and action.
