Banking
Expertise in providing credit management solutions across the credit lifecycle
We offer a variety of specialised products and services to the banking sector
Our solutions include a wide range of analytical and financial modelling services, credit risk consulting and end-to-end credit risk software that addresses all areas of the customer lifecycle. Our solutions have been widely deployed to commercial banks in the Middle East, Africa and Asia.
We offer the following solutions:
- IFRS 9 compliance
- Regulatory capital compliance (Basel Accord)
- Account management strategy design
- SmartSuite
- Scorecards and data modelling
Since 2016, a key focus for banks has been the institution of a new standard in bad debt provision calculation – IFRS 9. We have worked with banks across a wide range of products ranging from term loans and asset finance, to SME and commercial, to help build, review and manage their monthly IFRS 9 calculations. We also offer audit support to our customers and can assist to introduce economic models into the calculation. More information on our IFRS 9 offerings is detailed here.
Banks are required to calculate regulatory capital in terms of the regulations set out in the Basel Accords. Internal ratings-based (IRB) models incorporating probability of default (PDs), loss given default (LGDs), exposure at default (EADs) and credit conversion factors (CCFs) are produced and combined together, to determine the risk-weighted asset (RWA). Different approaches can be applied to calculate the RWA, ranging from a standardised approach to a full IRB approach.
We have successfully assisted multiple banks in both the development and the deployment of the models into our decision engine, DecisionSmart.
Account management strategies fuel the profits on many revolving products. For banks this would mainly be credit cards. Banks utilise a variety of account management decision areas to best manage accounts namely:
- Credit limit management – both increases and decreases
- Authorisation strategies – determining over-limit spend authorisation
- Card renewal – determining who to offer a card renewal to and the offer term
- Existing customer marketing – incentives to encourage further spend by the customer
- Predelinquency – preventing up-to-date accounts becoming delinquent by taking pre-emptive measures
When building strategies on these decision areas there are various options available.
- Expert strategies allow for best practice segmentation built without data.
- Customised strategies utilise data to determine optimal decision keys and segmentation breaks.
- Champion/challenger option allows for the run of multiple strategies in parallel where accounts are randomly allocated one of the strategies. The strategies are monitored and a new champion strategy is crowned every 12 months.
- Optimisation strategies utilise mathematical optimisation techniques to determine for example, optimal credit limit offers or over-limit authorisation amounts in order to increase profitability and reduce risk.
SmartSuite
Our SmartSuite incorporates a range of software that assists banks to manage customers from originations through account management and collections. Systems offered include the following:
All banks have a significant requirement to build and deploy models throughout the bank, including financial models and scorecards across the credit lifecycle.
We have been assisting banks around the world for more than 20 years in building and validating scorecards. Not only do we offer traditional scorecards – our offering also includes the building of machine learning models, as banks are starting to incorporate these models into the credit risk assessment process. Our rigorous build process and documentation will ensure our models pass stringent bank governance requirements.
