Collaborative Application Decisioning: What is it and How Does it Help Companies Differentiate?

Aug 30, 2023
Art Gendelman

The way a business runs its credit decisioning is an important part of what differentiates it from the competition. Each business has unique goals, risk tolerance, and customer base. Credit decisioning is the execution of a company's credit policies and allows them to tailor their credit offering based on their target market and optimize their risk-return tradeoff.

Companies that don’t build their own credit decisioning process often partner with players with a one-size-fits-all solution. However, this usually sacrifices the flexibility to tolerate different types of data and different forms of risk.

In contrast, Highnote’s collaborative underwriting provides a framework to help inject your credit decisioning into the application decisioning process. This approach empowers you with the control and flexibility necessary to modify your credit policies as you become the ultimate authority in underwriting decisions. This independence from external parties facilitates the alignment of credit decisioning with innovative use cases.

Let’s explore how exactly collaborative underwriting works and how it could benefit your card program.

What is Collaborative Underwriting?

At Highnote, companies building and scaling card programs (or those companies’ underwriters) can provide an approve or deny credit risk decision based on the credit policy for applicants of their product. At the same time, Know Your Customer (KYC), Know Your Business (KYB), and Office of Foreign Assets Control (OFAC), or fraud decisions are made on the application by other parties.

How Does Collaborative Underwriting Work?

Highnote can help its customers orchestrate the sequencing of application decisioning calls to optimize acquisition costs.

Typically, the application decisioning process starts with a credit application undergoing regulatory checks, such as KYC, KYB, and OFAC. In Highnote’s case, it executes these checks on its customers’ behalf. These checks help ensure compliance with relevant regulations and mitigate potential risks.

Depending on a customer’s onboarding strategy, Highnote can program a simultaneous request of the application's data against the company's credit policy or can execute the underwriting decision after the initial regulatory check. A simultaneous orchestration request will result in faster decisioning, whereas a subsequent request could reduce the data costs of acquisition. Regardless, Highnote can use the data gathered from these two sets of requests in any order to execute a final application decision.

What Makes Highnote’s Collaborative Underwriting Process Different?

One key aspect that sets Highnote's collaborative underwriting process apart is its extensive documentation. The documentation provides clear instructions in user-friendly terms, enabling companies to implement the process smoothly and successfully.

Additionally, Highnote offers an intuitive GraphQL-based API dashboard where a company creating a card program can enable collaborative application underwriting and customize it effortlessly. Once an application is submitted to Highnote, the customer is sent a notification event requesting the underwriting decision. Highnote awaits the customer's call with their underwriting decision to determine the final decision of the application.

Highnote differentiates itself again by offering a comprehensive list of adverse action reasons available in the API reference, accompanied by human-friendly descriptions. This lets customers easily identify the reasons for the denial and communicate them transparently to applicants. Highnote also stores this data and makes it accessible for regulatory compliance.

Transforming Card Program Underwriting with Highnote

Collaborative underwriting at Highnote empowers companies to build card programs while ensuring compliance and creating differentiated payment experiences. By leveraging technology, data analysis, and the expertise of underwriters, Highnote enables faster and more accurate application decisions. The extensive documentation and user-friendly API dashboard further enhance the process's ease of implementation. With Highnote's collaborative underwriting, companies have the flexibility to own their underwriting decisions, providing differentiated payment experiences that are unique to their brand and valued by their customers.

To explore how Highnote's collaborative underwriting can revolutionize your business, talk to us!

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