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Scorecard Health-Check - Ensure your scorecards are still fit for purpose.

We all work in a constantly changing market place and an evolving economic climate.

Staying one step ahead of emerging trends with on-going analysis of your scorecards and decision-making policies will help ensure that you safeguard your customers, protect your business and your cash flow.

Our scorecard health check service will provide you with a clear view of the efficiency and cost-effectiveness of how your scorecard is used within your current decision making process. It provides critical insight that indicates your exposure to risk, the strengths of your strengths of current decision process and efficiencies that will help you stay one step ahead of the competition.

  • A view of your portfolios current position within the market - A tailored Market & Portfolio Insight report, comparing your portfolio (stock) to a specific peer group* or the ‘rest of market’ for a series of key lending terms and performance metrics
  • Identification of risk concentrations within your portfolio - A view of your levels of £ exposure, arrears and loss rates (for lender portfolio and peer group/rest of market) by geography, demographic segment, customer risk score band, loan to value on mortgages and monthly disposable income
  • An understanding of the customers’ affordability position – modelling net monthly income and household expenditure, combined with the customer mortgage/rent payments and existing credit commitments from the bureau.
  • An economic report showing the impact of alternative interest rate scenarios on the key economic drivers of affordability and household disposable income. The scenarios will be developed specifically for the demographic and geographic profile (FSS segment and Local authority area) of the portfolio being analysed
  • A predictive view of the impact of each of the  economic scenarios on each customers  household’ disposable income and the impact rising interest rates could have upon your specific portfolio
  • Where your future risk concentrations are under each interest rate scenario
  • Forecasts of arrears and losses for your portfolio under each scenario
  • On-going monitoring of effectiveness of remediation actions and risk concentrations
  • A variety of options, from standard to bespoke services

Our tailored solutions aim to give you the insight you need to use within your strategy and planning. Specifically providing you with:

1.     Regulation support

a.     Supports your case for a reduction in capital requirement

b.    Avoidance of penalties

c.     Reduced effort required internally to support reporting overheads

2.     Operational planning

a.     Maintain levels of collections performance as interest rates rise

b.    Case prioritisation and specific collections paths

c.     Determine level of additional resources required to service portfolio

3.     Risk appetite

a.     Manage acquisition strategy and lending policy to reduce concentrations of customer base in current and future high risk segments

b.    Project arrears and loss rates to refine risk appetite statement for risk committee and regulator

4.     Mitigation of future risks

a.     Identification of customers at risk in the future

b.    Pro-actively reduce exposure or restructure to reduce monthly payments

c.     Target customer service calls or financial reviews

 

An Experian scorecard health check is tailored to the specific requirements of the business. It can be applied where any level of decision-making occurs through the credit lifecycle – from acquisition to collections. The comprehensive report incorporates a benchmarking summary of your strengths and weaknesses in comparison to your market peers.

  • Up-to-date insight and data to support accurate and timely decisioning
  • Understand strengths, opportunities, weaknesses and threats through a detailed analysis of your current scorecard suites
  • Tailored report to focusing on your business objectives
  • Holistic review across the customer lifecycle
  • Benchmark against your competitors and market peers
  • Identify business challenges and address them effectively
  • Clear improvement strategy reflecting priority and ease of implementation

Experian will work with your organisation to tailor a scorecard health-check report that will highlight potential opportunities to enhance your decision-making. There are four key stages to the Health-Check service:

  • Benchmarking against market peers - Provides insight into how your portfolio compares to your peers within the market.  This could highlight where to focus actions as part of the overall road-map.
  • Is your scorecard performance optimal? Review how scorecards are performing against business goals and expectations.
  • Can policy and strategy rules be enhanced?  Ensure that your current policy and strategy rules are being applied effectively and taking into account current market conditions which may impact scorecard discrimination and decision-making. Enhanced policy rules can help to focus underwriters on applications where they can have the most benefit.
  • Assess potential opportunity from new data sources - Review of where potential uplift could be obtained through provision of new / different data assets.

Given early signs of economic growth recent emphasis has been on increasing approvals through acquisition strategy. Experian has been able to illustrate that re-developing acquisition scorecards coupled together with the usage of new data assets could deliver in excess of a 5% increase in approvals for no predicted impact to your exposure to risk.

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