Are you a lender considering using Decision Logic?
A potential borrower whose prospective lender is requesting a bank verification through Decision Logic’s automated system and you’re wary of what it is, how it works, and whether it’s secure?
We know bank verifications sound odd at first sight– but this technology is the only way to verify bank statements instantly and securely.
In short, the Decision logic is the most secure bank verification technology created to date.
Read on to find out more about Decision Logic, why it originated, who developed it, and how it works.
After reading, we hope you have a clearer understanding of the importance of the Decision Logic software in creating a safer lending environment within the U.S.’ post-subprime crisis economy.
Why do lenders use Decision Logic?
Decision Logic was developed by CEO Carl Fredericks– former Vice President of an IBM partner and account manager for several governments, industrial, and financial institutions– and CTO and President David Evans– who has over 25 years as a Chief Technology Officer and experience as a Scientific Adviser to the UK Government among other roles.
The Decision Logic software was developed to be an advanced bank verification system that would enable lenders to instantly verify financial information in the battle against fraudulent bank statements which has been a growing concern and becoming more prevalent in the business lending space.
It was designed in the wake of the 2008 financial crisis caused in part by a loosening in upholding qualification standards for the approval of home mortgages where many applicants were submitting altered statements to get approvals for mortgages they were not qualified for.
Without adequate technology to verify if the banking information placed down during the qualification process was valid or not, many received mortgages beyond their financial capability.
As a result, families were left paying for a mortgage they couldn’t afford and ultimately lost their homes in the housing bubble that resulted from it. As the evolution of the financial technology markets spread to the business side of things. Decision logic has become the standard for bank verifications.
For lenders, Decision Logic gives them a way of quickly and easily verifying qualifying bank information that helps them make a smart decision about who they lend to, a practice that helps not only the lender but the borrower as it keeps them from taking on a loan they can’t afford.
And so, Decision Logic doesn’t just help prevent fraud but improve industry standards throughout the fintech industry.
Is Decision Logic a scam?
It’s natural– and healthy– to be wary of any service that asks for your banking information. Especially in the days of mass data breaches and other technology-related scams.
After all, in the information age, information itself is valuable and can be misused.
However, it’s an occasional misconception by some aspiring borrowers that Decision Logic itself is a scam designed to steal your banking information.
In fact, that couldn’t be further from the truth.
Decision Logic today works with over 21,000 financial institutions and is a trusted entity that helps make the lending process easier for both borrowers and lenders.
According to Decision Logic’s documentation:
“We have partnered with the leading credit and financial data providers around the world to offer a unique Data Provider Aggregation Environment. DecisionLogic has harnessed the latest technologies of these data providers and brought to the market a solution that is innovative, easy to use, efficient, and secure.”
For many lenders, Decision Logic is a trusted partner that helps them, and the borrower, proceed through the approval process faster and with less hassle.
How Decision Logic works
So, how does the Decision Logic service work?
If you’re in the process of applying for a business line of credit or loan, you might be wondering what exactly the service will do in accessing and retrieving your information.
If you’re a lender, you might be wondering exactly how you can use Decision Logic to streamline the information retrieval process.
Here’s a breakdown of each step:
Step 1: Send a link
Before closing a business loan or advance application, the lender sends a custom Decision Logic link via either text SMS message or email which the applicant/business owner accesses.
Step 2: Customer opts-in
Next, the applicant inputs their banking information. Keep in mind that this link can only be used once, so as soon as the link is used it can’t be accessed again.
Step 3: Opt-in successful
Once the information has been inputted, the opt-in is successful and the verification process is complete.
The customer will then receive a success notification and is redirected to the lender’s website automatically.
Keep in mind, as a further security measure, if the applicant does not input their information within a certain period of time, that link is voided and will no longer work.
In addition to that, only underwriters will have access to the data– and strictly date-to-date business statements– not Decision Logic or the lender.
Step 4: View bank statement
Now, the lender has access to the applicant’s bank statements which they can review for authentication purposes. This also allows the lender to connect via API and helps expedite the funding process.
The statement the lender receives is a read-only version of the applicant’s business bank statements, solely for the purpose of helping determine approval.
And that’s all there is to it! The entire process is started and completed in as little as a matter of minutes.
Does Decision Logic store access to your banking information?
This is a common question from potential borrowers as they move through the application process.
This simple answer is:
Decision logic does not keep your login credentials on file.
Its technology allows a lender to retrieve the last 12 months of banking activity and as well as for them to cross-reference the data received when applying for the loan to avoid deals being funded with doctored statements.
It also allows the financial institution to view your current months’ activity to prevent prospective borrows from double funding– i.e. taking two loans from different lenders at the same time and effectively over-leveraging themselves and becoming at risk for default as a result.
Decision Logic review: A quick look
If you’re a lender, should you use Decision Logic? What are the benefits? And are there any other services like Decision Logic?
As there’s nothing on the market like Decision Logic, given that they’re the originators of the technology which is still in its infancy,
It’s hard to run a comprehensive review, as with Decision Logic being the originators of the technology, there aren’t many yet offering a similar service.
However, you do have a few options:
1. DecisionLogic 90
DecisionLogic 90 is Decision Logic’s basic product offering.
Its features include:
- Training
- Integration
- 24/7 Tech Support
- DL match
- 90 Days of Transactions
“Built for brokers and lenders” as it states on Decision Logic’s service page, their flagship product offers 90 days of transaction history, the defining feature of this version of the Decision Logic service.
However, for those lenders who want to be able to pull more data…
2. DecisionLogic 365
That’s where DecisionLogic 365 comes in.
DecisionLogic 365 is Decision Logic’s premium version, offering all the same features of DecisionLogic 90 including training, integration, and 24/7 tech support, but with one big upgrade: you get 365 days of transaction history.
This version of Decision Logic has a bigger price tag, though with 4x the data, it’s to be expected.
3. Finicity’s Financial Data Services
Finicity is another option to consider if you need a solution that will provide you with as much financial data as possible while streamlining the qualification process for your clients.
As opposed to a single product offering, Finicity is a data aggregator that has the ability to do many things in terms of acquiring financial data securely.
However, most notably, with Finicity’s Account History Aggregation, you get 180 days of transaction history, with the ability to get up to 24 months of transaction history as a one time pull, twice as much as DecisionLogic 365.
Similar to Decision Logic’s 90 and 365 services, this includes insights such as:
- Income deposits
- Expense categorization
- Transaction descriptions
- Account and loan balances
In addition to this, just as Decision Logic’s services, Finicity’s financial data services also include the ability to verify identity and account information, making it a comparable match to Decision Logic’s pioneering service.
Give the best to your clients and customers
As a lender, you want to make the application and qualification process as easy and painless for your prospective customers as possible.
After all, who likes filling out a ton of paperwork, running to the nearby printer, scanning, then emailing copies?
Decision Logic is a cutting-edge, secure technology that takes the hassle of locating and sending off your business bank statements away and replaces it with a simple and easy solution that takes just minutes to complete.
If you want to streamline your application process and erase the hassle of gathering and sending bank statements for your customers, an automated financial statement service such as Decision Logic can help do exactly that.
