Tricolor and the Flywheel Effect
The current pandemic and resulting financial uncertainty have forced lenders of all types to overcome unprecedented challenges and address a number of rapidly evolving and unknown variables.
Please read the attached white paper for more insight into these advantages and how they live in service to our customers.
Tricolor’s Fundamental Competitive Advantage
Tricolor utilizes traditional regression analysis to understand how these application attributes correlated with default, enabling it to grade - or segment - applicants into six distinct grades.
The Flywheel Effect (Continued)
Price value is the single most important factor for any consumer. So as Tricolor lowers prices by reducing the gross margin on its vehicle inventory, it attracts more customers. Then, by leveraging its proprietary risk model and segmenting the customers into six distinct grades, it offers the higher-grade applicants more favorable financing terms, optimizing conversions of these borrowers.
With Tricolor’s introduction of deep learning two years ago, the data network effect is even more profound. The company’s ability to segment is constantly improving as the system learns and optimizes in response to daily loan level payment and delinquency data.