Make the right decisions for customers across the customer lifecycle

Customised analytical solutions for your business that help set you apart and drive your strategy forward by making the best use of data

Analytical solutions designed to meet your specific business objectives.

Our custom solutions are built using your historical data and are therefore aligned to your customer profile. A customised solution enables all data available at the decision point (for example applicant demographics, credit bureau data, existing account information and geo-demographic information) to be used to predict how applicants and customers will behave in the future.

Application Scorecards are tools that allow organisations to predict the probability that an applicant will behave in a particular way, helping businesses to make effective automated decisions.

The most commonly used application scorecard for credit, predicts the risk of a customer paying or not. This supports you as a business to make automated, accurate and consistent decisions on whether to approve, review or decline applicants.

Application scorecards are statistical models typically developed using an institution’s historical data for the relevant product, if sufficient such data is available.

If relevant historic data is not available, for example if the scorecard is required for a new product, then Experian can provide representative generic data from their extensive data sources.

After the data has been extracted and verified it is critical to design a modelling data sample that is representative of the target portfolio and allows the resultant scorecard to meet the business objectives. This is achieved through detailed analysis of the available criteria, portfolio stability and behaviour. The model can then be developed using several methodologies, with linear and logistic regression proving to be the most common. Experian has more than 30 years of experience in successfully developing credit risk models for financial institutions.

In addition to your data, captured at the point of application, the most predictive application scorecard developments include credit bureau data which provides a detailed view of credit history. In addition to scorecards, Experian can provide extensive retrospective credit bureau data to support application scorecard developments.

Retain and grow the right customers for your business

Do you know who your most valuable customers are? Are any of your customers struggling to repay their debts with you or elsewhere? If you want to activate the right customers, whilst mitigating the risks, knowing how and where to focus your efforts by maximising the use of all available data and insight in everyday decisions is key.

How does it work?

We develop statistical models combining your data with our data alongside expert consultancy to predict how a customer will behave in the future. Behavioural scoring is used throughout the life of a customer relationship to inform management strategies for each customer, whether managing and supporting customers with financial difficulties or extending the relationship with customers through enhanced features or new products.

Improve collection and recovery rates

When accepting a new customer’s application for credit, or agreeing to extend credit for existing customers, assessments should be made to indicate the likelihood that the customer will be able to manage financially and will be able to comfortably repay the amount borrowed.

In addition, it is important to recognise that customer circumstances may change over time and lenders will need to understand them on an on-going basis in order to offer appropriate support throughout the relationship.

In today’s climate, the prioritisation of accounts in collections plays an integral part in controlling bad debt, knowing who to prioritise and in treating customers fairly.  For example, how frequently and through which channel to contact them can be difficult balance to strike.

With increasing pressure on lenders to illustrate and stimulate small business lending are you optimally placed to clearly evaluate requests for credit, set appropriate lending terms and make confident lending decisions?

Commercial scorecards can be used at the point of acquisition to accurately assess risk and help lenders to make decisions on whether to lend to businesses.

In addition, they can be used within a customer management environment and are often used to support with Basel provisioning.

Experian have a wealth of data sources and experience in combining these to develop bespoke commercial scorecards that can help you, as a lender, achieve business requirements.

A range of modeling algorithms are available including logistic and linear regression modeling techniques.

Considering all available predictive data items, a scorecard will be produced that combines these to output a score which accurately predicts any associated risk or concern of the applicant based on their profile and your policy and scoring rules.

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 current decision process and efficiencies that will help you stay one step ahead of the competition.

Experian will work with your organisation to customise a scorecard health-check report that will highlight potential opportunities to enhance your decision-making.

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.

Do you need support to understand IFRS 9 accountancy standards and how it affects loss forecasting? Our analytics experts can help.

As of 1st January 2018, IFRS 9 accountancy standards will replace IAS 39. What does this mean for businesses when it comes to loss forecasting? How can we help to support the transition from IAS 39 to IFRS 9?

The International Financial Reporting Standard (IFRS) 9 will see businesses making significant changes to the way expected credit losses are calculated. As a specialist in loss forecasting and impairment, Experian can work with you on a consultative basis to build and deliver a comprehensive approach to the new standards.

We can support you in anticipation of the accountancy standard change with an end to end solution covering four areas. This does vary however, from business to business, because your business is unique and our solutions can be tailored to your business requirements. Your loss forecasting methodology depends on whether you are under Advanced IRB or Standardised accounting standards, whether you have sufficient relevant historical data internally to support modelling lifetime losses and whether your lending policy or collections strategy has changed significantly in the recent past.

Modelling Expertise

With experience in building models that incorporate credit risk, we can support your internal modelling teams with acquiring new skills, or support you with a fully outsourced capability.

Market Data

It may be that you have a portfolio that is relatively new and has yet to build up the history required for lifetime loss forecasting. Alternatively, it could be that changes have been made to lending/collections policies that have made all, or a proportion of your historical data, inapplicable for future modelling. We can advise as to the best approaches regarding historical data.

Economic Trends and Forecasts

Our economists and credit risk analysts work together to understand the relationships between lending policy and the economy, and how it affects credit risk. We provide generic bureau scores with the economic impact embedded. You can use these scores to determine changes in credit risk and include them within lifetime probability of default models.

Ongoing Evaluation of Forecast and Actual Losses

Lifetime loss models should be re-assessed quarterly or bi-annually to keep up with changes in loss rates and changes in the economy. We can help with this and benchmark your position against your peers and against market lifetime losses.