The quality and sophistication of credit assessment and credit management strategies in most lending organisations has never been higher. The vast majority of lenders utilise a combination of advanced statistical models, such as scorecards, and lending policy rules to predict payment performance, determine acceptance strategy and set terms of business.
However, a world class decisioning solution does not stop with the implementation of scorecards and lending rules as these are empirically derived and yet they are expected to function as designed in constantly changing market conditions and a fluctuating economic environment. Trading in these dynamic and somewhat adverse conditions will inevitably impact applicant profiles and payment performance which is highly likely to result in a deterioration of credit policy and scorecard effectiveness.
DecisionMetrics has developed a scorecard monitoring solution that can be used to monitor both application and behavioural scorecards.
The benefits of the DecisionMetrics solution include:
- Minimise implementation impact on internal business and IT resources
- Better utilisation of skilled analyst resource – shift of focus away from production of reports towards analysis and interpretation of results
- Management Summary reports tailored to meet client objectives
- Web access to interactive reporting tool replaces the need for local software installation and monthly uploading of data
- Retrospective data load of development samples to ensure continuity of monitoring
- Extracts from the monitoring database supplied as tab delimited data files are easy to use with other analytical packages such as Excel, Access, Sas etc.
- Data source for future fine-tuning and redevelopment of scorecards
- Consultancy support with bi-annual workshops to review decision trends
DecisionMI can be configured to meet client requirements with regards to monitoring of credit risk decisions for all brands, portfolios and scorecard levels, as well as for specific segments of the business. The web based solution is available via user specific secure access.
DecisionMI has two licence levels. The first is the Management Summary consisting of a set of predefined industry standard monitoring reports produced on a monthly basis. Key Indicators are used to alert the User to any areas requiring further investigation.
The second level is DecisionMI Interactive which consists of the Management Summary and Interactive reporting, which allows the user to tailor the report parameters for more in depth analysis without the need for local software installation or additional data. In addition to the reporting, data can be extracted from the historic monitoring database for account level analysis or future scorecard developments.
Trend analysis and ‘traffic lights’ triggered by a number of key indicators help to identify areas of concern which allows the production of exception reports that can help facilitate auditing and follow-up of individual decisions.
Management Summary Licence
Each month a Management Summary pack is generated from the standard reports and published on the client specific secure web page. The Management Summary typically focuses on system stability through monitoring of recent business and scorecard performance, comparing actual results to the expected (e.g. from scorecard development). However, the monthly reports can also be configured to include monitoring of specific trends or business segments depending on client specific requirements. In addition to the current set of reports, a library of historic reports is available to view via the web interface. All reports are output in excel format and graphs and tables can therefore be saved and further manipulated by the user, if required.
DecisionMI Interactive Licence
DecisionMI Interactive can be accessed via the web user interface and enables the user to conduct ad-hoc analysis of any characteristics or business segments that may not be included in the Management Summary. The user can also define the report parameters with regards to time periods and good/bad definition, both from predefined lists and by applying specific formats (groupings) to the characteristics included in the report. In addition, there is a free format filter option which can be used to drill down even further by creating specific subpopulations from any characteristic in the database.
Historic Monitoring Database
DecisionMI is automatically processed as soon as the application and performance input files have been supplied by the client, typically once a month. To ensure continuity of monitoring, a retrospective data load is normally included with the initial setup of DecisionMI. Together with the new applications and snapshots of account performance stored each month, the monitoring database therefore represents a valuable data source of comprehensive application, decision and performance information.
As part of the monthly update, account level data extracts from the monitoring database can be supplied back to the client (via SFTP). These could be exception reports to meet requirements for detailed review of specific segments or a full extract of the historic database that can be utilised for ad-hoc account level analysis and future fine-tuning or redevelopment of scorecards and policy rules.
Ask us anything about scorecard and portfolio monitoring and how we can help your business. Contact us today to speak to one of our experts.