The Power of Media Searches: Why Lenders Use Them
In today’s digital age, the lending industry has witnessed a significant transformation, driven by advanced technologies and an abundance of data. Lenders have access to a wealth of information about borrowers, far beyond traditional financial records.
Most borrowers are aware of credit agencies and credit searches but lenders also search media entries. In this post, we will explore why lenders use media searches when making lending decisions.
Comprehensive Risk Assessment
Media searches provide lenders with a comprehensive view of a borrower’s financial health over and above what the figures and accounts show. Traditional financial records may not reveal the whole picture, they are after all a historic event, but a deep dive into media sources can help lenders understand the borrower’s financial history, lifestyle, and any red flags that may indicate creditworthiness.
For instance, a borrower who frequently appears in the media for lavish spending, is pictured outside court or has a story about a major supplier dispute may raise concerns about their ability to manage debt responsibly. A business with media coverage about breaching planning may not be approved for development finance, you get the gist.
Identifying Fraudulent Activities
One of the critical reasons lenders use media searches is to detect potential fraudulent activities. Individuals (or businesses they operate) with malicious intent often use fake identities and fabricated financial information to secure loans. Media searches can uncover inconsistencies in a borrower’s story, helping lenders identify fraudsters and mitigate their risks. This is something we have seen more of with lenders reviewing their CBIL and BBLS lending books.
Evaluating Reputation and Trustworthiness
Lenders are not only concerned about a borrower’s ability to repay a loan but also their willingness to do so. Media searches can reveal a borrower’s reputation, level of trustworthiness, and any public disputes or legal issues. This information can help lenders make more informed decisions about whether a borrower is likely to fulfill their financial obligations and whether this is a client the lender wants to be associated with.
Compliance and Regulatory Requirements
In the ever-evolving world of financial regulations, lenders are required to perform due diligence on borrowers to meet compliance standards. Media searches can be a valuable tool in fulfilling these obligations, helping lenders ensure that they are making responsible lending decisions and reducing the risk of regulatory penalties. These searches can often tell a lender far more than any other resource the lender has
Media searches have become an essential tool in the modern lending industry. By delving into a borrower’s public presence, lenders can gain a more complete understanding of their financial situation and behavior. This information not only helps lenders make more informed lending decisions but also safeguards their lending book and ensures they are in compliance with the necessary regulations.
While media searches may raise concerns about privacy, when used responsibly and within legal boundaries, they can contribute to a fairer, safer, and more transparent lending ecosystem that benefits both lenders and borrowers.
If you want to know more about how lenders will consider a situation or want options on financing your business then get in touch.
By Dave Farmer