Financial services companies can’t afford to get blindsided by fair lending risk. A single regulatory violation or negative headline can erode the confidence of your customers, damage your reputation, and result in fines and penalties.
When it comes to fair lending compliance, though, your organization might not even know about its biggest threats. To try and quantify these unknowns, more banks are using data analytics to identify fair lending risk. Data analytics tools can provide quantitative data related to banking practices, highlighting the gaps and risks in lending patterns and fair lending compliance efforts.
However, it’s important to understand the limitations of data as well as its benefits. Data analytics software can provide data, but it can’t interpret that data and translate it to a practical, comprehensive fair lending compliance strategy. To turn data into effective action, you need human expertise, experience, and perspective.