Foresight Blog

What Lenders Can Learn From Online Dating

The financial services industry could learn a lot from the online dating scene.

Every day, lenders have to make a judgment call, “is this person someone we should approve for a loan?”. Obviously, this is a data driven decision. No one is using intuition to discern the creditworthiness of the gentleman or woman sitting before them.

But more often than one would think, the data that drives this decision-making process is misrepresented by the prospective borrower.

One of the most frequently overstated personal details is, of course, income.

This is no secret to the online dating industry. The popular dating site, OkCupid, reports that in aggregate, users on their site make 20% less than what they claim publicly.

The truth is, lying about income can become a serious risk factor in the profile of a prospective borrower. One doesn’t have look beyond the recent housing crash to find proof.

But It’s not just lenders who are getting duped. Organizations conducting pre-employment screening, social services, or property managers, are all susceptible to losing out on an income fib.

Income verification services are an easy way to quickly verify earnings, to gain a fuller perspective of your prospect’s risk profile. Drawing from tax return records, income verification is a government-grade tool that delivers the most up-to-date confirmation you need to make better business decisions.

Take a page out of the online dating playbook: people aren’t always honest when it comes to talking about their paycheck!

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Arrest Records: The Missing Ingredient For Risk Mitigation

“Innocent until proven guilty”.

This hallmark of our justice system makes sure that we don’t falsely accuse or imprison our citizens. But this same safety valve in our judicial process could be putting your organization at risk.

For certain positions or team roles, you need to know everything you can about a candidate. The principle of risk mitigation is simple: the more information you have about an individual, the lesser the risk. However, many background checks and data providers are only serving up part of the story, with “convictions” records.

This means that your prospective teacher, lendee, or children’s minister could have been arrested for any number of crimes that will never appear on a background check. Unless that individual was actually convicted of the crime, with a guilty verdict, they will appear to have a clean record.

Technically, if one is never convicted of a crime, they are presumed to be innocent. But wouldn’t you want to know if your person of interest had been arrested 5 times for the same type of incident? Many arrests will never lead to a conviction, but that information is essential for any type of serious risk mitigation process.

To get a fuller picture of your candidate’s background, your criminal records provider should be delivering arrest records along with a reliable history of convictions. Arrest records will help you discern patterns of risky or criminal behavior that could endanger your organization.

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