finance

In every business, it is important to understand your customers but no more so than in the world of finance — where the stakes are comparatively much higher. For a bank, each customer presents a risk, especially when it comes to loaning money. Bad loans are full of risk, good loans are not. Ultimately, deciding whether that risk is worth taking is a decision of paramount importance and can affect the bank balances of people the world over.Investment in risky loans is more likely to end up with customers defaulting on their payments — the consequences of this have been made painfully clear in recent history.With this kind of responsibility at stake, banks tend to analyse their customer’s finances with the utmost scrutiny. Loans are granted — only — when an applicant meets certain criteria. ...