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Gain a clear vision with scoringAdvanced scoring and analytical
services
Data is at the heart of advancedcredit risk management.
Ourdeveloped expertise in turning datainto information
enablesorganisations to predict how clientswill behave in the
future.
Scoring models
Experian MicroAnalytics builds generic and customscoring models
in markets all over the world.
Generic scoring models are built from data derived fromknowledge
of the credit industry tempered by the local
market conditions. Generic scores can be quicker toimplement and
do not require an archive of historicaldata for development, which
makes them very useful instart-up situation, or when data is not
available.
Custom scoring models are build using historical datasupplied by
the client and are tuned to the clientscustomer profile. They are
designed in consultation withthe organisation to meet specific
business objectives,such as credit risk, attrition, and
propensity.
A new approach to model development
Many organisations lack the data, resources orknowledge to build
and maintain effective models.
Experian MicroAnalytics has developed a new approachto the
delivery and monitoring of models using acombination of pooled
data, analytical techniques,software and consulting support.
Data pooling brings together data from clientorganisations in an
anonymous format and, usingproprietary algorithms to align the
profile of the pool tothe clients own data, it produces a robust
sample ofdata for development. The resulting model is morerobust
and predictive, enabling customized models to beimplemented,
especially for organisations with limiteddata.
Once scoring models are built, Experian MicroAnalyticsundertakes
detailed and regular monitoring to ensurethat they continue to work
optimally.
We deliver experience and expertise gained from developing more
than 300scorecards per year.
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Combining new thinking with existing methodologies, ensures the
analyticaltechniques used continue to evolve to create effective
solutions
Origination
Application scoring in the origination process is used to
predict how a potential client will behave in the future.
With this information, decisions can be made whether to accept
or decline a loan application.
As well as credit risk, origination scoring objectives
include:
Indebtedness how will the applicants level of indebtedness
affect their ability to honour this creditcommitment?
Attrition will this applicant stop using a credit facility in
the future?
Propensity will this applicant take out more credit products in
the future?
Cross-Sell/ Up-Sell which applicants are the best candidates for
offers of other products andservices?
Customer Management
Behavioural scoring is used throughout the life of a customer
relationship to predict how an existing client willbehave in the
future.
As well as credit risk, behavioural scoring objectives
include:
Customer value how valuable is this customer to the organisation
now and in the future?
Indebtedness how will the customers level of indebtedness affect
their ability to honour this creditcommitment or cope with a limit
increase?
Attrition will this customer stop using a credit facility in the
future?
Propensity will this customer take up offers of further
products?
Cross-Sell/ Up-Sell which customers are the best candidates for
our offers of the other products andservices?
Debt Management
Collection scoring is used to prioritise collections activities
to maximise recoveries and reduce collection costs.
An understanding of the customer drives collections and debt
recovery activity in terms of:
Customer value how valuable is this customer to the organisation
and what is the most appropriateaction to maintain the
relationship?
Risk and delinquency will this customer continue to be
delinquent and how much is at risk?
Potential recovery value how much could be recovered from the
account and will it cover the costs ofthe collections activity?
Basel II
The Basel Capital Accord (Basel II) requires Banks to estimate
probability of Default (PD), Loss Given Default(LGD) and Exposure
at Default (EAD) for groups of exposures.
We have helped many organisations around the world build
estimates of PD, LGD and EAD and embed themin their business
processes to meet the use test requirements.
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