Banxware Embedded Lending Blog

Embedded Finance

Gamechanger: Automated Identity Resolution in Risk Assessment

Applying automation tools in smart ways, Banxware succeeded in significantly improving our risk assessment in both, efficiency and precision. This not only ensures an optimized use of resources but also allows for a better embedded lending experience for our customers.
Paula Otten
31. October

Though the pandemic seems ages ago, we still live in a post-pandemic world where lenders as well as borrowers ought to be hyper-aware of (potential) uncertainties in the market. Naturally, the business loan market sees a heightened focus on risk assessments too. Having a sophisticated underwriting in place can be a challenge though. At Banxware, we managed to overcome this challenge by relying on the automated software solution developed by Tilores. Continue reading to find out how it took our credit risk assessment to the next level.

The Problem

Every day, Banxware receives a large amount of  loan applications from SMEs via our platform partners. Making a credit risk  decision entails scrutinizing each application, individually and diligently.  One of the initial steps in the assessment is to double check if an applicant  has applied for Banxware’s financing in the past or is an existing customer.  This process is defined as identity- or entity resolution. It is an  imperative part of the risk analysis as duplicates are indicative of fraud.  That said, manually identifying these duplicates out of a wealth of data is  not just cumbersome but also prone to error: A minor modification in a loan  application suffices and a duplicate goes unseen. The probability for error  only increases with increasing application and loan volumes.

While many financial service providers are still opting for manual processes, Banxware took the innovative route: We knew that the future lies in automation and deploying it wisely.

The Solution

At that time, Banxware made the far-sighted decision to not waste the valuable time of our in-house resources for entity resolution. Since day 1 of starting our Embedded Lending journey, we knew that our financing solution must deliver a state-of-art lending experience and allow us to scale quickly. Tilores’ automated identity resolution convinced us immediately. Due to their existing integration with Snowflake—a cloud-based data warehouse—the process of connecting our customer data was seamless and swift, without having to deploy valuable engineering resources.

Further facilitating the implementation of Tilores was the straightforward API integration to Taktile, an automated credit risk assessment software that specializes on SME-lending. Because Taktile was already partnering with Banxware at that time, the API integration went incredibly smooth and allowed both systems to communicate with one another: i.e., Taktile can request and cross-check data from Tilores to make an informed credit risk decision. This data exchange happens in real-time and is fundamental to assure the uniqueness of each loan applicant.

Scale and Growth

As demand for SME lending continues to grow, having a sophisticated data infrastructure in place was inevitable to scale our business. To do so, we knew early on that we needed a savvy and reliable partner with state-of-the-art software. With our decision to integrate Tilores’ entity-resolution software, Banxware took its Embedded Lending to the next level and further contributed to our standing as an industry innovator.

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