DecisionMetrics has constructed a suite of ‘recession scores’ aimed at helping lenders to manage very specific elements of customer management. Built using criteria that have been significantly affected by the recession, the aim is to identify those customers whose future payment performance may not match the original risk assessment because of the adverse recessionary impacts.
Customer arrears are rising rapidly and roll rates are increasing significantly which suggests that credit scores built pre-recession may no longer perform as designed. Given such circumstances, lenders need to understand the impact of the recession on their portfolios and can identify those customers that are most affected.
Gary Scott, director at DecisionMetrics, said: “These pre-delinquency and early collections scores are designed to be used in conjunction with a lender’s existing customer management processes to provide the very ‘recession insight’ that a lender’s existing behavioural scores are not capable of identifying.”
- Increased customer insight – identifying in advance those customers most likely to suffer from the impacts of the recession.
- Effective use of resources – ‘reason codes’ are provided that identify why the customer may experience problems. These can be used to support dialogue with the customer.
- Operational strategy – blending statistical analytics and operational experience to provide an initial operational strategy that can be reviewed and refined over time.
- Return on investment – minimal systems development means rapid implementation is possible with no up-front cost.
- Bureau independent – the scores are designed to use existing credit bureau monthly batch data extracts.
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