Credit Risk Scorecards
Chapter One
Introduction
Increased competition and growing pressures for revenue generation
have led credit-granting and other financial institutions to search for
more effective ways to attract new creditworthy customers, and at the
same time, control losses. Aggressive marketing efforts have resulted in
deeper penetration of the risk pool of potential customers, and the need
to process them rapidly and effectively has led to growing automation of
the credit and insurance application and adjudication processes. The
Risk Manager is now challenged to produce risk adjudication solutions
that can not only satisfactorily assess creditworthiness, but also keep the
per-unit processing cost low, while reducing turnaround times for customers.
In addition, customer service excellence demands that this automated
process be able to minimize denial of credit to creditworthy
customers, while keeping out as many potentially delinquent ones as
possible. In the insurance sector, the ability to keep the prices of policies
commensurate with claims risk becomes more critical as underwriting
losses increase across the industry.
At the customer management level, companies are striving ever
harder to keep their existing clients b ... read full excerpt from Credit Risk Scorecards: Developing and Implementing Intelligent Credit Scoring ebook
