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Least-Cost Routing


Why Would I Use Least-Cost Routing?

Customers are unique, from their credit scores to their consumer needs. The depth of their credit history varies as well. The data required to grant credit to a customer with little or no credit history (i.e., the underbanked or underserved) is very different from a customer who has an established credit history. However, maintaining a breadth of data connections to meet the range of applications can be costly and time consuming.

By using least-cost routing, less-expensive data can be pulled first, reducing the cost of decisioning an applicant. Financial institutions (FIs) can also define backup data and service providers to their primary sources to ensure uptime, or they may be interested in geographic (or zip code) preference. In cases where credit bureau data is insufficient, FIs may include other information to evaluate credit behavior, such as scores based on utility payments. This increases the number of applicants that can be decisioned.

How Would I Use Least-Cost Routing?

Any element of data can be incorporated into the routing process. For example, 80 percent of address mismatches are associated with fraud attempts. By evaluating data in the application and credit reports to identify when a mismatch occurs, Zoot can trigger routing to a data source designed to address that need, such as an address or identity-verification service. FIs can also use secondary data (e.g., LexisNexis) to boost the accuracy of models for marginal, but promising, consumers.

More Ways to Meet Your Data Connection Needs

Along with vendor priority routing, Zoot also developed its data and services integration hub to offer our clients a single connection to dozens of data and service providers and reduce the costs of data acquisition while increasing the scope of available data.

Zoot’s zLinkSM Data Integration Hub is data-provider independent to give clients the ability to prioritize data-provider routing as well as the intelligence to route additional vendor pulls. Applications can be routed based on the content, data received from vendors, and specific institution requirements. Dozens of data and service providers are available through Zoot’s vendor network, eliminating the necessity for clients to accept an inferior or bundled data product because of connectivity or pricing barriers.

The Path to More Efficient and Effective Decisioning

Institutions should not have to sacrifice the quality of credit evaluation when using an automated solution. Zoot’s tools and services allow you to customize your FI’s routing process through our network to facilitate customized, seamless credit analysis. The results are a decrease in overall data costs by leveraging the open hub of data providers and better decisioning through more information.