The Importance of Real-Time Financial Data of Financial Institutions

by Henry S. Growing Your Business Has Never Been Easier

Apply for financing - The business owner must submit unstandardized financial documentation to be reviewed. Most often, they only have last year's accounts. These provide a snapshot of the past six months. These static data do not reflect the dynamic nature and accuracy of the business.

To make a credit decision, the financial company must perform a complete risk assessment using old balance sheet data. Data from banks is not enough for risk assessment.

Although it might seem good to bring in data through single API companies that connect accounting and CRMs, analytics, and other systems, deeper data drilling reveals that small businesses don't keep up-to-date records in these systems, so the data is ineffective.

Financial institutions must have access to financial data in real-time to be able to assist small businesses. This will allow them to anticipate and monitor working capital requirements, reduce the administrative burden of loan on boarding, and decrease default risk.

API allows banks and financial lenders to access a company's vendor and client lists. They also have insight into hundreds of data points that show how profits are changing and can provide real-time information.

Lenders make loan underwriting decisions based on specific parameters. If a business meets enough parameters, they may send the business an offer in a push or pull model. Pre-approval for loans can also be automated. This is in place of the lender reviewing each application manually.

APIs allow permission-based access to customer's financial information via custom API report dashboards and customized financial parameters.

When API data is exchanged bidirectional, the process of lending to both small businesses and lending companies becomes seamless.