Credit Risk

We have a strong team of experienced risk specialists who work with clients to develop bespoke services to better understand and manage their exposure to credit risk, and we leverage our strong industry relationships to help clients implement and deliver while minimising additional workload. Our scale and range of experience across different portfolios means we can deliver the best objective advice, analytic rigour, and open knowledge exchange,standing us apart from the crowd.

The effective management of credit risk is a critical component of a comprehensive approach to risk management and essential to the long-term success of any banking organisation. Our goal is to help financial institutions maximise their risk-adjusted rate of return by improving management of credit risk exposures, providing guidance on optimised parameter setting and ensuring enhanced management of the credit lifecycle.

Below are some of the specific services within our broad range of expertise which are designed to ensure financial services firms achieve these goals.

 
 
 
Pricing

Credit Decisioning

We have a background in supporting clients in the development of a range of risk vs reward (pricing) models for use in credit decisioning. These can range from simple judgment based approaches to analytical methods such as the “break-even” models. However, in light of general advancements as a result of IFRS 9, we advocate an enhanced approach that considers all financial elements and behaviours by segment to derive a decsions based on a minimum Return on Equity (RoE). To achieve this we bring together our extensive modelling, data and product experience to develop bespoke fully encompassing lifetime RoE models.


Validation


Our goal is to provide independent model validation to critically assess models ensuring their integrity and independence, by identifying model risks and helping eliminate, mitigate or accept such risks. Through segregation of duties from those responsible for developing models, we can support and own the process of reviewing and challenging the new or existing models to aid the production of consistent and accurate results. We can help institutions develop methodologies and templates for assessing model construction approaches, assumptions and compliance to regulatory and/or approved internal standards. 

 
 
 
 
 
Validation

 
 
 
 
 
Model Monitoring

Model Monitoring


We have developed our own unique model monitoring tool (4amc™) that delivers automated monitoring and calibration for all retail credit risk model monitoring, in both the secured and unsecured space. With this tool, we can help clients deliver a consistent framework to enable the flexibility of both batch and ad hoc execution, whilst producing all inputs required for quarterly model monitoring reports across unsecured and secured portfolios. The results of the assessment can then be used to standardise all current processes into one suite of consistent, auditable and transparent processes. 4amc™ has been deployed for use within IRB and IFRS 9 models, as well as other internal models.


collection & recovery strategies


We combine superior collections insight with a proven track record in operational system delivery to tailor the design of bespoke collection decision engines to your specific business needs, and our team is adept at delivering solutions that ensure full regulatory compliance. Our approach is to work with clients to understand their business and key objectives, from which we derive appropriate segmentation through the utilisation of advanced analytics and devise efficient treatment strategies to drive benefit. The technical development of the full deployment culminates in an end to end solution covering; ISO27001 compliant hosted batch processing, strategy tree development using statistical techniques via a graphical interface, champion challenger functionality, user friendly action plan compiler and comprehensive MI and audit functionality.

 
 
 
 
 
 
 
 
Collection & Recovery Strategies

Scorecard Development.png

Scorecard Development


We have a proven track record in scorecard development. We deliver a blend of advanced statistical techniques and practical requirements to meet business needs and in doing so we add value to acquisition, fraud, collections and customer management strategies. Our consultants have extensive experience in extracting value from internal data and multiple bureau sources, to produce scorecards that provide a comprehensive view of a customer’s credit risk.