Creditworthiness has long been a focus for consumer lenders, and now the topic is once again in the spotlight with the Swedish government's tightened regulations for lenders. In short, the new legislation means that lenders must meet stricter requirements to get or keep their license.
But with people's finances constantly changing, basic, self-reported data from traditional application forms is no longer enough. Basing credit scoring on static data is like navigating an old paper map in a city where the streets are constantly being redrawn.
Scoring models, known as application scorecards, based on static application forms provide only a fragmented snapshot. They rarely capture the real, changing financial situation: income from multiple sources, varying expenses, and rapidly shifting life patterns. What's more, customers demand fast and personalized answers when it comes to loans, just like in every other aspect of life. Without behavioral insights based on actual activity, lenders risk making decisions based on incomplete or outright misleading information.
This is where real-time transactional insights make a real difference - not just to meet regulatory requirements, but as a crucial tool for more accurate credit decisions and improved customer experiences. Together with forward-thinking customers, we have seen what the shift from static information to dynamic behavioral data actually means in practice: increased risk accuracy, better conversion and a faster, more efficient credit process. Early on, it became clear that the high quality of our data enables more than just compliance. It directly contributes to business-critical outcomes - fewer credit losses, higher efficiency and happier customers. Today, this approach is an established standard in the Danish credit market - not as a set of rules to follow, but as a way to compete.
Over 85% of Danish car finance companies and 72% of consumer finance companies now use Monthio to make smarter credit decisions. The results speak for themselves:
But what is the real secret? It's not just about collecting more data. It's about getting real insights in real time - insights that reflect real financial behaviors. By turning these into faster, fairer and more informed credit decisions, our Danish customers have taken a giant leap towards the future of finance.
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Our solutions provide a detailed overview of the applicant's income, expenses, assets, liabilities and cash flow. In Denmark, we can also complement this with cross-validation against public and private data sources, such as tax authorities, debt registers, property registers, vehicle registers and much more. This integration provides our customers with accurate data and saves applicants a lot of time in the application process. But more importantly, we don't just collect and forward data. We interpret it - quickly and at scale - to reveal:
All these factors are delivered in a comprehensive, complete and easy-to-read financial overview. The information is readily available - for automated credit decisions, credit assessors, customer service and the applicant themselves. Our insights empower lenders to make decisions based on reality, not assumptions.
Despite our already strong data infrastructure, we continue to explore new ways to improve our credit modeling capabilities. One of our most ambitious internal R&D initiatives was a fully automated credit modeling prototype - not as a product, but as a research project across multiple loan segments between 2023 and 2025.
The results were promising: our transaction-based, more dynamic variables showed up to three times higher predictive power than their more static application-based counterparts. Even standard tasks such as 'net income' were significantly more effective when calculated from real transactions instead of declared values - proving the value of high-quality data.
Bringing a full-scale modeling engine like this to market would have required significant development resources and a long time to market. Instead, we chose to incorporate the insights from the study into the ongoing, iterative development of our existing, operational solutions. In addition, the lessons learned continuously inspire us in how we structure and process over 2000 variables, helping us to enable lenders to make smarter and faster decisions without necessarily having to build and maintain complex models themselves.
We have documented our journey, methodology and results in detail.
Read our full memo: "Using transactional data for credit modelling"
Danish lenders already have access to comprehensive and advanced financial overviews for their applicants, and Monthio is now adapting this proven framework to meet the specific requirements of the Swedish market - in line with both regulatory requirements and consumer expectations.
Instead of relying on static, self-completed application forms, Swedish lenders can now get a real-time picture of applicants' financial situation based on their behavior. This makes it possible to improve approval rates, reduce risk and tailor offers more effectively - while maintaining a smooth and efficient credit process.
Does this sound like a big change for your business? It doesn't have to be. In Denmark, we've helped lenders implement smarter data strategies without increasing complexity. More data doesn't have to mean more work - when used properly, it can streamline workflows, strengthen compliance and improve overall performance.
Whether you're a Head of Credit, Chief Risk Officer or Head of Lending - if you're ready to develop smarter credit products, we'd love to share what works. Let's talk - no strings attached, just insights.
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