Why having a Spreading tool that helps evaluate risk is more important than ever

Khushboo Gajwani

Khushboo Gajwani

January 03, 2024


2023 has been quite the year for the financial industry as it continues to deal with and adapt to the ongoing and challenging economic conditions the world has been facing.  

With that in mind, when it comes to underwriting lending practices,  the importance of advanced spreading tools cannot be overstated, especially in this ever-evolving financial landscape, where heightened risk, security, and tightened loan practices are the norm. These proactive tools have become indispensable for banks and credit unions navigating the complexities of risk assessment, offering a strategic advantage in the challenging financial environment.

As lending institutions become increasingly more selective in their business loan approvals, the emphasis on identifying borrowers with a high likelihood of repayment and loan-term value has never been more critical. Traditionally, loan risk assessments heavily relied on manual processes and historical data. However, this time-consuming approach falls short in capturing the intricacies of the borrower's risk profile in today's dynamic and interconnected world. 

Why Spreading Tools matter now more than ever:

Increased Accuracy and Efficiency:

Spreading tools leverage artificial intelligence and lender controls to analyze extensive datasets, encompassing financial statements, credit reports, and more. Numerated’s AI-data-driven spreading solution generates 100% accurate spreads in less than 5 minutes. This comprehensive approach not only expedites decision-making for financial institutions but also enhances the accuracy of risk assessments.

Early Detection of Risk:

Proactivity is key in risk mitigation. Spreading tools such as the one provided by Numerated excel in identifying potential risks at an early stage, enabling banks to take preventative measures before losses occur. This foresightedness significantly improves portfolio performance and safeguards the financial health of the institution.

Improved Compliance:

The evolving regulatory landscape demands consistent and transparent risk assessments. Spreading tools facilitate compliance by providing a standardized approach, saving institutions from the pitfalls of costly fines and penalties.

Enhanced Decision-Making:

By offering valuable insights into borrower behavior and risk profiles, spreading tools empower institutions to make more informed lending decisions. This not only contributes to a more profitable loan portfolio but also fortifies the financial position of the bank or credit union. 

Adaptability to Changing Conditions:

The dynamics of ever-changing markets and economic conditions require sophisticated tools that can keep evolving as per the need. Spreading tools can be continually updated and refined, ensuring that banks always operate with the latest and most accurate data in their risk assessments.

The integration of a spreading tool for risk evaluation is no longer a mere competitive advantage – it has become an indispensable prerequisite for success in today's challenging financial environment. By harnessing technology to make informed decisions, financial institutions can not only mitigate risk but also improve profitability, ensuring long-term financial stability in an ever-evolving financial landscape.

As institutions continue to adopt new technology to drive efficiency across the small business segment, those leveraging Numerated are seeing value from their investments faster. With the power of Digital Underwriting, lenders can process massive amounts of data in minutes, significantly reducing work in the underwriting process by up to 90 percent. 

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