Will Credit Scoring
Transform the Market for Small- Business Lending? -
In an effort to reduce the cost of small-business lending, some institutions
are using credit scoring technology to reduce underwriting costs and to
grow their small-business lending portfolios, in some cases venturing into
markets well beyond their local economies. The ramifications could
be significant. An overreliance on credit scoring models could expose
lenders to increased credit risks. Over time, the traditional niche
enjoyed by small banks in small- business lending could come under considerable
pressure.
Banking on the
Internet: New Technologies, New Opportunities, New Risks -
Internet banking promises a wide range of new benefits. It also offers
a host of new problems and some new twists on old ones. The tradeoff
is one that depository institutions and regulators alike must grapple with
as they stake out their positions in cyberspace.
