Today’s credit solutions make use of a number of different models and rules to automate as much of the process as possible. While this provides strong credit risk management and efficiency in the decisioning process, it does mean that continual review of the effectiveness of the solution is vital.
Most solutions make use of a combination of different tools with the below generally being at the heart of the solutions:
Newer techniques including machine learning models are now also being deployed. These only increase the need for ongoing review and monitoring.
It is important to understand how these different tools can be used and how they interact together to give a complete view of a customers risk profile.
An analytical review of a credit providers portfolio will allow the credit provider to streamline the risk assessment process, while at the same time ensuring that all necessary data is collected to estimate customer risk, and monitor and manage accounts over the customer life cycle.
Comprehensive Credit Decisions consultants have been involved in the building, monitoring and ongoing management of different risk models including bureau scorecards and customised scorecards. They have previously worked with organisations to review and provide recommendations around the performance of those credit provider/credit bureau’s risk models and rules.