Credit scoring is a statistical technique used to evaluate credit risk by assigning a score based on a borrower's credit history and other data. It allows lenders to consistently evaluate large numbers of loan applications and distinguish higher and lower risk applicants. Statistical scoring models are more accurate and objective than judgment-based decisions. While credit scoring improves lending processes, concerns remain that some populations like minorities may be disadvantaged. Overall, credit scoring provides an effective way for lenders to balance risk and returns when granting loans.
More than half of all small business used some kind of business credit last year as working capital. Find out how you can manage exposure. Get solutions for your cash flow needs from Christine Janklow, president, SettleSource, Inc. and David Gass. president, Earn.com. Learn more at http://bit.ly/aHxjc0 .
This document provides information on various factors that affect credit scores, including payment history, credit utilization, credit history, types of credit in use, and inquiries on your credit report. It explains that payment history (35%), credit utilization (30%), credit history (15%), types of credit in use (10%), and inquiries (10%) make up the main components used to calculate credit scores. Specific details are given on what is considered for each component and tips to improve credit scores.
Credit risk management in banks is a complex process that involves identifying, measuring, monitoring, and controlling risks associated with a bank's lending activities. The document discusses several key aspects of credit risk management:
1) It outlines various methods used by banks to assess credit risk when lending such as cash flow analysis, balance sheet analysis, and assessing repayment capacity.
2) It discusses the importance of proper credit appraisal, monitoring existing loans, and having standards for security, documentation, and loan renewals.
3) It notes that credit risk arises from both internal factors like faulty underwriting and external factors like changes in government policy or industry conditions. Managing this risk requires tools like exposure limits, risk ratings, and regular
This document discusses challenges in credit scoring and data mining for credit risk assessment. It provides background on credit scoring, including a brief history showing its evolution from judgment-based to data-driven models. Key challenges discussed are that business objectives like risk, profit, and response often conflict, and multiple models may be needed. Data mining approaches for credit scoring are also reviewed, such as logistic regression and decision trees. The chapter aims to illustrate compromises between data mining theory and practical challenges in credit risk applications.
Best Practices in Improving Customer Experience by Focusing on Overlooked Tou...Siegel+Gale
Siegel+Gale's Executive Director of Simplification Irene Etzkorn presented "Best Practices in Improving Customer Experience by Focusing on Overlooked Touchpoints." In this session, attendees learned how simplifying the interaction between customer and company can improve the customer experience.
This document discusses credit risk modeling for alternative lending. It begins with introductions of the speakers and defines credit risk modeling as using statistical models to predict loan default by combining credit, contract, and personal attributes. It then discusses key aspects of credit risk modeling like scorecards, cutoff scores, alternative lending players, and regulatory pressures. It emphasizes that while logistic regression remains important, alternative lenders must creatively treat small samples, potential predictors, and frequent model refits to account for their differences from traditional banks.
More than half of all small business used some kind of business credit last year as working capital. Find out how you can manage exposure. Get solutions for your cash flow needs from Christine Janklow, president, SettleSource, Inc. and David Gass. president, Earn.com. Learn more at http://bit.ly/aHxjc0 .
This document provides information on various factors that affect credit scores, including payment history, credit utilization, credit history, types of credit in use, and inquiries on your credit report. It explains that payment history (35%), credit utilization (30%), credit history (15%), types of credit in use (10%), and inquiries (10%) make up the main components used to calculate credit scores. Specific details are given on what is considered for each component and tips to improve credit scores.
Credit risk management in banks is a complex process that involves identifying, measuring, monitoring, and controlling risks associated with a bank's lending activities. The document discusses several key aspects of credit risk management:
1) It outlines various methods used by banks to assess credit risk when lending such as cash flow analysis, balance sheet analysis, and assessing repayment capacity.
2) It discusses the importance of proper credit appraisal, monitoring existing loans, and having standards for security, documentation, and loan renewals.
3) It notes that credit risk arises from both internal factors like faulty underwriting and external factors like changes in government policy or industry conditions. Managing this risk requires tools like exposure limits, risk ratings, and regular
This document discusses challenges in credit scoring and data mining for credit risk assessment. It provides background on credit scoring, including a brief history showing its evolution from judgment-based to data-driven models. Key challenges discussed are that business objectives like risk, profit, and response often conflict, and multiple models may be needed. Data mining approaches for credit scoring are also reviewed, such as logistic regression and decision trees. The chapter aims to illustrate compromises between data mining theory and practical challenges in credit risk applications.
Best Practices in Improving Customer Experience by Focusing on Overlooked Tou...Siegel+Gale
Siegel+Gale's Executive Director of Simplification Irene Etzkorn presented "Best Practices in Improving Customer Experience by Focusing on Overlooked Touchpoints." In this session, attendees learned how simplifying the interaction between customer and company can improve the customer experience.
This document discusses credit risk modeling for alternative lending. It begins with introductions of the speakers and defines credit risk modeling as using statistical models to predict loan default by combining credit, contract, and personal attributes. It then discusses key aspects of credit risk modeling like scorecards, cutoff scores, alternative lending players, and regulatory pressures. It emphasizes that while logistic regression remains important, alternative lenders must creatively treat small samples, potential predictors, and frequent model refits to account for their differences from traditional banks.
P2P lending –a “financial intermediary in social democracy” – indian scenarioPrashanth Ravada
This document discusses the emergence of peer-to-peer (P2P) lending as a new financial intermediary model in India. P2P lending platforms allow individuals and businesses to access loans at lower interest rates compared to traditional lenders. The model provides a new investment opportunity for retail investors. The document notes that India's rural and semi-urban areas are underserved by traditional banks and have high reliance on informal lending. P2P platforms could help expand access to credit for small businesses and individuals in these areas by using an online platform to efficiently connect lenders and borrowers. The document examines the role and process of P2P lending in India and how it might contribute to financial inclusion.
Financial Advisors in MA Transactions (PLI Trends) - 1-11-16Kevin Miller
This document summarizes key issues relating to the role of financial advisors in mergers and acquisitions (M&A) transactions. It discusses the narrow holding of the Delaware Supreme Court in RBC Capital Mkts. v. Jervis that an advisor can be liable for aiding and abetting a breach of fiduciary duty if it intentionally misleads or dupes the board. It also discusses the potential implications of Corwin v. KKR Financial Holdings, including whether stockholder approval of a transaction not subject to entire fairness review invokes the business judgment rule. Finally, it addresses the need to identify and disclose any actual or potential conflicts of interest between financial advisors and transaction participants.
A credit score is a numerical representation of a person's creditworthiness based on statistical analysis of their credit files and reports. Lenders use credit scores to evaluate lending risk, determine loan qualifications and pricing, and identify the most profitable customers. Credit scoring analyzes past credit behavior according to the 5 C's - character, capacity, capital, collateral, and conditions - to predict loan repayment likelihood.
The credit risk management team consists of Sanika Dixit, Shweta Vaidya, Sneha Salian, and Snehal Datta. Their goal is to assess and mitigate credit portfolio risks to reduce financial losses from borrower default. The BI solution enables accurate risk assessment, loss reduction, and faster reporting by analyzing key performance indicators like profit, customer growth, and credit risk at the region, product, and branch level.
Credit rating agencies played a pivotal role in the subprime crisis by assigning too favorable ratings to subprime mortgage-backed securities. Their business model of being paid by issuers created conflicts of interest, as they had incentives to give high ratings to win business. Regulators have since implemented new rules requiring more transparency and restrictions on conflicts, but critics argue the changes do not go far enough to ensure accurate ratings or reduce reliance on the agencies. Investors and the agencies themselves also need to be cautious of potential biases from the current system.
Advancing credit services through the application of credit bureau technologyFrank Lenisa
The document discusses advancing credit services through the application of credit bureau technology. It notes that the G20 has prioritized financial inclusion and that over 2.7 billion people lack access to basic financial services. Credit bureaus are described as critical financial infrastructure that collect credit histories to provide to lenders. They add value through risk scores and application processing software. Integrating alternative data like utilities and telecom payments can expand the information available to credit bureaus. Advancing financial inclusion responsibly through technology provides opportunities to increase access to more people.
The document discusses automating the corporate credit approval process. It describes how the current process is inefficient, involving multiple disparate systems and high operational costs. An automated solution is proposed to streamline the process, improve visibility and control, expedite loan applications, and ensure compliance. The key benefits of the solution include faster credit availability, reduced risks and costs, and an enhanced customer experience.
This document provides information about FICO scoring and credit reports. It discusses how FICO scores are calculated using various factors related to credit usage and payment history. The key factors that affect FICO scores are payment history, amounts owed, length of credit history, new credit, and types of credit used. The document also discusses how to improve credit scores by correcting credit reports, paying down debt, and establishing new credit lines over time. Maintaining positive payment histories is important for achieving higher FICO scores that are favorable for loans and insurance rates.
The failure of credit ratings agencies to accurately rate structured financial products like mortgage-backed securities and collateralized debt obligations contributed significantly to the 2008 financial crisis. While some reforms have been implemented, the ratings process remains opaque and problematic. This paper proposes establishing a single, public numerical scale for rating structured credits as a better way to standardize risk measures, increase transparency, and empower investors to evaluate risk more accurately. Such a benchmark scale, treated as a public good, should be developed and supported by a federal financial regulator.
Credit rating agencies play a key role in the modern financial system by providing ratings that assess the creditworthiness and risk of default for debt instruments. While ratings agencies increase market efficiency through widely available low-cost information, their business model is unusual in that issuers, not investors or users, pay for ratings. This can potentially compromise the independence and objectivity of agency ratings. The role of ratings agencies has expanded over time as regulations increasingly require their use in investment and lending decisions. Factors like independence, credibility, disclosure, and a developed debt market are important for ratings to effectively fulfill their function of informing investors.
Credit rating agencies play a key role in financial markets by providing independent ratings of financial instruments. Their ratings help investors assess risk and make investment decisions. Over time, credit rating agencies have become important due to various factors such as regulations requiring certain investment minimum ratings, and the growth of securitization and global capital markets. However, their business model, where issuers pay for ratings rather than investors, creates a potential conflict of interest that could compromise rating objectivity. Credit ratings communicate an agency's opinion on the probability that a debt issuer will default, but they are not guarantees or recommendations, and do not consider all risk factors in an investment.
Turning Your Website into a Cross-selling Machine (Credit Union Conference Pr...NAFCU Services Corporation
The document summarizes a presentation about turning credit union web portals into sales machines for insurance products. Some key points:
1) Having an "insurance aisle" on credit union websites can generate insurance customers every day and provide annuitized fee income without requiring prospecting or marketing from the credit union.
2) Most consumers now research insurance options online before purchasing, so credit union websites need to provide insurance rates, education, and an easy purchasing process to meet member needs and capture this business.
3) Integrating insurance quotes and purchases directly into the web portal experience, from loans to bill pay, allows automatic marketing of options to members at natural "triggers" or moments in their relationship with the credit
The Positive Impact of Utility Credit Reporting WebinarExperian
Learn the importance and positive impact of utility data reporting. Experian will share what alternative data encompasses, how the new trade data is added, and specifically how energy, utility, and water companies can assist in improving their customers’ credit score. We’ll also walk you through the resources and support available.
You will get an inside look at the positive impact of alternative data reporting and learn how to:
•Improve collections
•Bolster credit profiles
•Positively impact credit scores
•Effectively assist your customers
See the factors that make up a credit scoring calculation, frequently asked questions about credit reports, and common misconceptions of credit scores.
1) Commercial banks need to adopt an event-driven management approach to better coordinate underwriting and credit risk management teams. This will help streamline processes and protect credit standards.
2) Currently, underwriting processes are fractured and complex, leading to inefficient use of time and resources. Deal approval processes in particular are disorganized and prone to lobbying.
3) An event-driven framework would define key "credit events" such as evaluating portfolio fit, deal structure, and approval/review. This would introduce standards and clarity around roles and responsibilities to expedite decision making.
Louisiana Small Business Loans – Get Approved For Small Business Financing dhamza
Louisiana small business loans are an excellent option for obtaining funding. Online lenders tend to offer lower interest rates and more flexible terms than banks. To apply, you fill out an application form including basic information and it will be reviewed by multiple lenders. Loan amounts range from $25,000 to $10 million depending on the type of loan. Online lenders can offer better rates than banks because they have more borrower information and can make faster decisions.
Credit Reports & Scoring is designed to help individuals understand their role and responsibilities when viewing credit reports. It will prepare Mortgage Loan Originators with the required knowledge in order to successfully analyze a borrower's credit report. You will obtain a clear understanding of the types of credit reports and how to access these reports. For more info: www.nafcu.org/genworth
InKnowVision June 2012 HNW Technical Webinar 1 - Valuation PlanningInKnowVision
The document provides an overview and summary of a webinar on valuation and its impact on succession planning. It discusses why valuations are necessary for tax and succession strategies, how the valuation expert fits into the succession team, and how valuations are used for tax and business planning. It also covers valuation methodologies, discounts, IRS case law, and differences between fair market value and investment value.
This document provides an overview of credit risk in banking. It defines credit risk as the risk of losses from a counterparty failing to meet obligations. Credit risk makes up 50-70% of banking risks. The document outlines various debt instruments like loans and bonds that expose banks to credit risk. It discusses macro assessments of credit risk through metrics like non-performing loans and credit growth at the country level. It also covers micro assessments using tools like credit registers, ratings, scoring models and other quantitative credit risk models.
This document discusses practical applications of risk assessment tools in retail lending. It covers scoring, use of credit bureaus, risk-based pricing, and strategies for dealing with distressed assets. Scoring is presented as an ongoing process of improvement to predict risk and drive desired business outcomes. Credit bureaus provide valuable customer data when used appropriately. Risk-based pricing links interest rates to predicted risk levels to balance customer retention, revenue growth, and risk costs. Distressed asset portfolios require individual evaluation using techniques like discounted cash flow analysis and consideration of collateral value, sales costs, and bankruptcy procedures.
The document discusses Exprivia's software solutions for automating credit lending processes. It describes CreditOnWeb, which supports the credit approval process from application to approval, and CONTMAN, which automates contract generation from validated templates. Both tools integrate risk and business perspectives to improve efficiency, reduce costs, and ensure compliance. The document provides examples of how the tools support various stages of the lending process and references installations at major banks across Europe.
This document discusses credit risk modeling and provides an outline for a course on the topic. It introduces statistical, structural, and reduced form models for analyzing default probability. Key aspects covered include probability of default, loss given default, credit ratings, factors that affect default, and using logistic regression to estimate credit scores and map them to default probabilities and rating classes. The document also lists relevant textbooks and academic papers on credit risk modeling.
P2P lending –a “financial intermediary in social democracy” – indian scenarioPrashanth Ravada
This document discusses the emergence of peer-to-peer (P2P) lending as a new financial intermediary model in India. P2P lending platforms allow individuals and businesses to access loans at lower interest rates compared to traditional lenders. The model provides a new investment opportunity for retail investors. The document notes that India's rural and semi-urban areas are underserved by traditional banks and have high reliance on informal lending. P2P platforms could help expand access to credit for small businesses and individuals in these areas by using an online platform to efficiently connect lenders and borrowers. The document examines the role and process of P2P lending in India and how it might contribute to financial inclusion.
Financial Advisors in MA Transactions (PLI Trends) - 1-11-16Kevin Miller
This document summarizes key issues relating to the role of financial advisors in mergers and acquisitions (M&A) transactions. It discusses the narrow holding of the Delaware Supreme Court in RBC Capital Mkts. v. Jervis that an advisor can be liable for aiding and abetting a breach of fiduciary duty if it intentionally misleads or dupes the board. It also discusses the potential implications of Corwin v. KKR Financial Holdings, including whether stockholder approval of a transaction not subject to entire fairness review invokes the business judgment rule. Finally, it addresses the need to identify and disclose any actual or potential conflicts of interest between financial advisors and transaction participants.
A credit score is a numerical representation of a person's creditworthiness based on statistical analysis of their credit files and reports. Lenders use credit scores to evaluate lending risk, determine loan qualifications and pricing, and identify the most profitable customers. Credit scoring analyzes past credit behavior according to the 5 C's - character, capacity, capital, collateral, and conditions - to predict loan repayment likelihood.
The credit risk management team consists of Sanika Dixit, Shweta Vaidya, Sneha Salian, and Snehal Datta. Their goal is to assess and mitigate credit portfolio risks to reduce financial losses from borrower default. The BI solution enables accurate risk assessment, loss reduction, and faster reporting by analyzing key performance indicators like profit, customer growth, and credit risk at the region, product, and branch level.
Credit rating agencies played a pivotal role in the subprime crisis by assigning too favorable ratings to subprime mortgage-backed securities. Their business model of being paid by issuers created conflicts of interest, as they had incentives to give high ratings to win business. Regulators have since implemented new rules requiring more transparency and restrictions on conflicts, but critics argue the changes do not go far enough to ensure accurate ratings or reduce reliance on the agencies. Investors and the agencies themselves also need to be cautious of potential biases from the current system.
Advancing credit services through the application of credit bureau technologyFrank Lenisa
The document discusses advancing credit services through the application of credit bureau technology. It notes that the G20 has prioritized financial inclusion and that over 2.7 billion people lack access to basic financial services. Credit bureaus are described as critical financial infrastructure that collect credit histories to provide to lenders. They add value through risk scores and application processing software. Integrating alternative data like utilities and telecom payments can expand the information available to credit bureaus. Advancing financial inclusion responsibly through technology provides opportunities to increase access to more people.
The document discusses automating the corporate credit approval process. It describes how the current process is inefficient, involving multiple disparate systems and high operational costs. An automated solution is proposed to streamline the process, improve visibility and control, expedite loan applications, and ensure compliance. The key benefits of the solution include faster credit availability, reduced risks and costs, and an enhanced customer experience.
This document provides information about FICO scoring and credit reports. It discusses how FICO scores are calculated using various factors related to credit usage and payment history. The key factors that affect FICO scores are payment history, amounts owed, length of credit history, new credit, and types of credit used. The document also discusses how to improve credit scores by correcting credit reports, paying down debt, and establishing new credit lines over time. Maintaining positive payment histories is important for achieving higher FICO scores that are favorable for loans and insurance rates.
The failure of credit ratings agencies to accurately rate structured financial products like mortgage-backed securities and collateralized debt obligations contributed significantly to the 2008 financial crisis. While some reforms have been implemented, the ratings process remains opaque and problematic. This paper proposes establishing a single, public numerical scale for rating structured credits as a better way to standardize risk measures, increase transparency, and empower investors to evaluate risk more accurately. Such a benchmark scale, treated as a public good, should be developed and supported by a federal financial regulator.
Credit rating agencies play a key role in the modern financial system by providing ratings that assess the creditworthiness and risk of default for debt instruments. While ratings agencies increase market efficiency through widely available low-cost information, their business model is unusual in that issuers, not investors or users, pay for ratings. This can potentially compromise the independence and objectivity of agency ratings. The role of ratings agencies has expanded over time as regulations increasingly require their use in investment and lending decisions. Factors like independence, credibility, disclosure, and a developed debt market are important for ratings to effectively fulfill their function of informing investors.
Credit rating agencies play a key role in financial markets by providing independent ratings of financial instruments. Their ratings help investors assess risk and make investment decisions. Over time, credit rating agencies have become important due to various factors such as regulations requiring certain investment minimum ratings, and the growth of securitization and global capital markets. However, their business model, where issuers pay for ratings rather than investors, creates a potential conflict of interest that could compromise rating objectivity. Credit ratings communicate an agency's opinion on the probability that a debt issuer will default, but they are not guarantees or recommendations, and do not consider all risk factors in an investment.
Turning Your Website into a Cross-selling Machine (Credit Union Conference Pr...NAFCU Services Corporation
The document summarizes a presentation about turning credit union web portals into sales machines for insurance products. Some key points:
1) Having an "insurance aisle" on credit union websites can generate insurance customers every day and provide annuitized fee income without requiring prospecting or marketing from the credit union.
2) Most consumers now research insurance options online before purchasing, so credit union websites need to provide insurance rates, education, and an easy purchasing process to meet member needs and capture this business.
3) Integrating insurance quotes and purchases directly into the web portal experience, from loans to bill pay, allows automatic marketing of options to members at natural "triggers" or moments in their relationship with the credit
The Positive Impact of Utility Credit Reporting WebinarExperian
Learn the importance and positive impact of utility data reporting. Experian will share what alternative data encompasses, how the new trade data is added, and specifically how energy, utility, and water companies can assist in improving their customers’ credit score. We’ll also walk you through the resources and support available.
You will get an inside look at the positive impact of alternative data reporting and learn how to:
•Improve collections
•Bolster credit profiles
•Positively impact credit scores
•Effectively assist your customers
See the factors that make up a credit scoring calculation, frequently asked questions about credit reports, and common misconceptions of credit scores.
1) Commercial banks need to adopt an event-driven management approach to better coordinate underwriting and credit risk management teams. This will help streamline processes and protect credit standards.
2) Currently, underwriting processes are fractured and complex, leading to inefficient use of time and resources. Deal approval processes in particular are disorganized and prone to lobbying.
3) An event-driven framework would define key "credit events" such as evaluating portfolio fit, deal structure, and approval/review. This would introduce standards and clarity around roles and responsibilities to expedite decision making.
Louisiana Small Business Loans – Get Approved For Small Business Financing dhamza
Louisiana small business loans are an excellent option for obtaining funding. Online lenders tend to offer lower interest rates and more flexible terms than banks. To apply, you fill out an application form including basic information and it will be reviewed by multiple lenders. Loan amounts range from $25,000 to $10 million depending on the type of loan. Online lenders can offer better rates than banks because they have more borrower information and can make faster decisions.
Credit Reports & Scoring is designed to help individuals understand their role and responsibilities when viewing credit reports. It will prepare Mortgage Loan Originators with the required knowledge in order to successfully analyze a borrower's credit report. You will obtain a clear understanding of the types of credit reports and how to access these reports. For more info: www.nafcu.org/genworth
InKnowVision June 2012 HNW Technical Webinar 1 - Valuation PlanningInKnowVision
The document provides an overview and summary of a webinar on valuation and its impact on succession planning. It discusses why valuations are necessary for tax and succession strategies, how the valuation expert fits into the succession team, and how valuations are used for tax and business planning. It also covers valuation methodologies, discounts, IRS case law, and differences between fair market value and investment value.
This document provides an overview of credit risk in banking. It defines credit risk as the risk of losses from a counterparty failing to meet obligations. Credit risk makes up 50-70% of banking risks. The document outlines various debt instruments like loans and bonds that expose banks to credit risk. It discusses macro assessments of credit risk through metrics like non-performing loans and credit growth at the country level. It also covers micro assessments using tools like credit registers, ratings, scoring models and other quantitative credit risk models.
This document discusses practical applications of risk assessment tools in retail lending. It covers scoring, use of credit bureaus, risk-based pricing, and strategies for dealing with distressed assets. Scoring is presented as an ongoing process of improvement to predict risk and drive desired business outcomes. Credit bureaus provide valuable customer data when used appropriately. Risk-based pricing links interest rates to predicted risk levels to balance customer retention, revenue growth, and risk costs. Distressed asset portfolios require individual evaluation using techniques like discounted cash flow analysis and consideration of collateral value, sales costs, and bankruptcy procedures.
The document discusses Exprivia's software solutions for automating credit lending processes. It describes CreditOnWeb, which supports the credit approval process from application to approval, and CONTMAN, which automates contract generation from validated templates. Both tools integrate risk and business perspectives to improve efficiency, reduce costs, and ensure compliance. The document provides examples of how the tools support various stages of the lending process and references installations at major banks across Europe.
This document discusses credit risk modeling and provides an outline for a course on the topic. It introduces statistical, structural, and reduced form models for analyzing default probability. Key aspects covered include probability of default, loss given default, credit ratings, factors that affect default, and using logistic regression to estimate credit scores and map them to default probabilities and rating classes. The document also lists relevant textbooks and academic papers on credit risk modeling.
This document discusses credit risk and credit ratings. It provides an overview of credit risk modeling, key determinants of credit risk like probability of default and loss given default, and the major credit rating agencies and their rating scales. It also describes the credit rating process, which involves both quantitative financial analysis and qualitative assessments, and results in an opinion on the issuer's ability to repay debt. Regulators require banks to measure and manage credit risk using models and capital requirements.
Credit Decision Indices: A Flexible Tool for Both Credit Consumers and ProvidersCognizant
Credit Decision Indices provide a unique value dimension in decision making by leveraging multiple credit frameworks, integrating risk perception and providing real-time feedback.
Sound Credit Risk Experience Sharing Vietnam Fsa And BankEric Kuo
The document discusses credit risk management and can be grouped into 3 important parts: credit rating, underwriting, and management. It provides examples of rating models that focus on different business segments and discusses factors to consider in building an internal rating system, emphasizing the importance of data. It also covers credit risk measurement standards outlined in Basel II and the process of mapping internal ratings to external ratings.
Counterparty risk in a post Lehmans World -- January, 2010catelong
Results from joint Credit/FitchSolutions survey shows most buy-side firms do not hedge counterparty risk.
Those surveyed cited hedging as too expensive.
The presentation suggest using CDS as early market systems of increasing risk from counterparties.
Systar's Credit Risk Decisioning for ACH application provides real-time credit risk information from across a bank's systems to help bankers make informed just-in-time decisions on ACH credit exposure. The application collects and correlates customer data to present key risk metrics on pending ACH files through intuitive dashboards. This helps bankers balance risk with customer service by avoiding credit being denied or extended erroneously.
Credit Rating Process with Respect to Corporate DebtSumit Kumar Singh
Volatility in the financial market is becoming common day by day as we are becoming more and more intensive towards global market. The importance of Credit Rating Agencies has gone up because an investor can't always keep track on key 'Financial Metrics' of companies. So investors try to fix this with the help of ratings assigned by Recognized Rating Agencies
The document summarizes the retail banking system in India as presented by Varsha Golekar. It discusses how retail banking has shifted from being credit and risk focused to being more customer centric. It provides an overview of the products, services, and processes involved in retail banking. Specifically, it describes TJSB Sahakari Bank Ltd's centralized retail banking cell and its processing of retail loans. It discusses the key risks in retail banking and the general documents required for loan applications and recovery processes.
Compuscan is a South African company established in 1994 that collects, validates, and distributes consumer credit information. It has 200 employees and offers products and services like credit bureau data, credit scoring, loan management software, collections services, and training. Compuscan also operates in other African countries by building credit bureaus and provides credit reporting.
Credit ratings are conducted by agencies to evaluate the creditworthiness of individuals, corporations, and countries. The rating process involves analyzing financial history, current assets and liabilities, as well as country risk, business risk, industry factors, and financial risk. Higher credit ratings indicate a lower probability of default and allow borrowers to access loans at lower interest rates. In India, major credit rating agencies include CRISIL, ICRA, CARE, and Fitch Ratings India.
Federal and state regulators such as the NCUA and ODFI examine credit unions on a roughly annual basis. Examinations focus on assessing risks like credit, interest rate, liquidity, compliance and reputation risks. Credit unions have the right to respectful treatment by examiners and to discuss and appeal examination findings and directives. Examiners are expected to identify problems but also work cooperatively with credit unions to find solutions.
Federal and state regulators such as the NCUA and ODFI examine credit unions on a roughly annual basis. Examinations focus on assessing risks like credit, interest rate, liquidity, compliance and reputation risks. Credit unions have the right to respectful treatment by examiners and to discuss and appeal examination findings and directives. Examiners are expected to identify problems but also work cooperatively with credit unions to find solutions.
Credit risk is the possibility that a borrower will fail to repay a loan according to the agreed terms. It arises when a bank lends money to customers or other banks. The probability of loss from credit risk is high if the likelihood of default is high. There are several types of credit risk, including default risk, concentration risk, and country risk. Banks assess credit risk through qualitative factors like loan documentation and quantitative factors like non-performing loans. Credit risk is managed through techniques such as risk-based pricing, collateral, and credit monitoring.
What is the role of credit rating agencies in our global financial system? Learn how credit ratings on securities are created and used. Part of a continuing series of introductory seminars for the financial services industry. We develop custom training, contact us for a quote or discussion of your needs.
This document provides a summary of skills and work experience for a candidate named A Constace. Allia. It outlines her proficiency with software like Microsoft Office and banking programs, as well as her experience as a portfolio manager, credit analyst, and group leader for closing departments at various banks. She has over 15 years of experience in banking and currently works as a senior credit analyst and realtor associate.
More carriers are providing this coverage on a sub-limited basis. It is essential for any business that takes credit card payments and/or stores credit card information on their servers.
Rs.25,000
The document discusses non-banking financial companies (NBFCs) in India. It defines NBFCs as companies that engage primarily in financial activities like lending but cannot accept demand deposits. It classifies NBFCs into different types and outlines some prominent NBFCs in India including Mahindra Finance, Muthoot Finance, Bajaj Finance, and IndiaBulls Finance. It provides details on the business models, loan portfolios, funding sources, growth prospects and risks of these NBFCs.
- Gemalto is a global leader in digital security, serving customers in banks and other industries with solutions used by over a third of the world's population daily.
- Gemalto provides strong authentication and fraud prevention solutions for online banking, including its Ezio Suite which supports multiple authentication channels and over 200 bank customers with 70 million delivered devices.
- Online banking fraud is increasingly sophisticated, using techniques such as man-in-the-middle attacks, phishing, and social engineering. Gemalto's solutions help mitigate these evolving threats.
KYC Compliance: A Cornerstone of Global Crypto Regulatory FrameworksAny kyc Account
This presentation explores the pivotal role of KYC compliance in shaping and enforcing global regulations within the dynamic landscape of cryptocurrencies. Dive into the intricate connection between KYC practices and the evolving legal frameworks governing the crypto industry.
In a tight labour market, job-seekers gain bargaining power and leverage it into greater job quality—at least, that’s the conventional wisdom.
Michael, LMIC Economist, presented findings that reveal a weakened relationship between labour market tightness and job quality indicators following the pandemic. Labour market tightness coincided with growth in real wages for only a portion of workers: those in low-wage jobs requiring little education. Several factors—including labour market composition, worker and employer behaviour, and labour market practices—have contributed to the absence of worker benefits. These will be investigated further in future work.
Fabular Frames and the Four Ratio ProblemMajid Iqbal
Digital, interactive art showing the struggle of a society in providing for its present population while also saving planetary resources for future generations. Spread across several frames, the art is actually the rendering of real and speculative data. The stereographic projections change shape in response to prompts and provocations. Visitors interact with the model through speculative statements about how to increase savings across communities, regions, ecosystems and environments. Their fabulations combined with random noise, i.e. factors beyond control, have a dramatic effect on the societal transition. Things get better. Things get worse. The aim is to give visitors a new grasp and feel of the ongoing struggles in democracies around the world.
Stunning art in the small multiples format brings out the spatiotemporal nature of societal transitions, against backdrop issues such as energy, housing, waste, farmland and forest. In each frame we see hopeful and frightful interplays between spending and saving. Problems emerge when one of the two parts of the existential anaglyph rapidly shrinks like Arctic ice, as factors cross thresholds. Ecological wealth and intergenerational equity areFour at stake. Not enough spending could mean economic stress, social unrest and political conflict. Not enough saving and there will be climate breakdown and ‘bankruptcy’. So where does speculative design start and the gambling and betting end? Behind each fabular frame is a four ratio problem. Each ratio reflects the level of sacrifice and self-restraint a society is willing to accept, against promises of prosperity and freedom. Some values seem to stabilise a frame while others cause collapse. Get the ratios right and we can have it all. Get them wrong and things get more desperate.
Discover the Future of Dogecoin with Our Comprehensive Guidance36 Crypto
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Dr. Alyce Su Cover Story - China's Investment Leadermsthrill
In World Expo 2010 Shanghai – the most visited Expo in the World History
https://www.britannica.com/event/Expo-Shanghai-2010
China’s official organizer of the Expo, CCPIT (China Council for the Promotion of International Trade https://en.ccpit.org/) has chosen Dr. Alyce Su as the Cover Person with Cover Story, in the Expo’s official magazine distributed throughout the Expo, showcasing China’s New Generation of Leaders to the World.
OJP data from firms like Vicinity Jobs have emerged as a complement to traditional sources of labour demand data, such as the Job Vacancy and Wages Survey (JVWS). Ibrahim Abuallail, PhD Candidate, University of Ottawa, presented research relating to bias in OJPs and a proposed approach to effectively adjust OJP data to complement existing official data (such as from the JVWS) and improve the measurement of labour demand.
The Rise and Fall of Ponzi Schemes in America.pptxDiana Rose
Ponzi schemes, a notorious form of financial fraud, have plagued America’s investment landscape for decades. Named after Charles Ponzi, who orchestrated one of the most infamous schemes in the early 20th century, these fraudulent operations promise high returns with little or no risk, only to collapse and leave investors with significant losses. This article explores the nature of Ponzi schemes, notable cases in American history, their impact on victims, and measures to prevent falling prey to such scams.
Understanding Ponzi Schemes
A Ponzi scheme is an investment scam where returns are paid to earlier investors using the capital from newer investors, rather than from legitimate profit earned. The scheme relies on a constant influx of new investments to continue paying the promised returns. Eventually, when the flow of new money slows down or stops, the scheme collapses, leaving the majority of investors with substantial financial losses.
Historical Context: Charles Ponzi and His Legacy
Charles Ponzi is the namesake of this deceptive practice. In the 1920s, Ponzi promised investors in Boston a 50% return within 45 days or 100% return in 90 days through arbitrage of international reply coupons. Initially, he paid returns as promised, not from profits, but from the investments of new participants. When his scheme unraveled, it resulted in losses exceeding $20 million (equivalent to about $270 million today).
Notable American Ponzi Schemes
1. Bernie Madoff: Perhaps the most notorious Ponzi scheme in recent history, Bernie Madoff’s fraud involved $65 billion. Madoff, a well-respected figure in the financial industry, promised steady, high returns through a secretive investment strategy. His scheme lasted for decades before collapsing in 2008, devastating thousands of investors, including individuals, charities, and institutional clients.
2. Allen Stanford: Through his company, Stanford Financial Group, Allen Stanford orchestrated a $7 billion Ponzi scheme, luring investors with fraudulent certificates of deposit issued by his offshore bank. Stanford promised high returns and lavish lifestyle benefits to his investors, which ultimately led to a 110-year prison sentence for the financier in 2012.
3. Tom Petters: In a scheme that lasted more than a decade, Tom Petters ran a $3.65 billion Ponzi scheme, using his company, Petters Group Worldwide. He claimed to buy and sell consumer electronics, but in reality, he used new investments to pay off old debts and fund his extravagant lifestyle. Petters was convicted in 2009 and sentenced to 50 years in prison.
4. Eric Dalius and Saivian: Eric Dalius, a prominent figure behind Saivian, a cashback program promising high returns, is under scrutiny for allegedly orchestrating a Ponzi scheme. Saivian enticed investors with promises of up to 20% cash back on everyday purchases. However, investigations suggest that the returns were paid using new investments rather than legitimate profits. The collapse of Saivian l
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1. CREDIT SCORING It is better to count than to guess
Tomáš Denemark
KIEV, September 2012
www.arbes.com
2. Content
Credit Scoring as a key element of the Credit Granting Process
Credit Scoring Introduction
Judgmental vs. Statistical Decision
Statistical Scoring Methodology … Credit and behavioural scoring are some of
Credit Scoring Typology the most important forecasting techniques used
in the retail and consumer finance area…
Credit Scoring Data Sources …. With the connections being made between
scoring for default and scoring for targeting
Credit Scoring Risks potential sales, the scoring techniques will
Conclusion clearly be used to forecast the sales of products
as well as the profit a company will make in the
future….
Source: A survey of credit and behavioural scoring: forecasting financial risk of
lending to consumers - Lyn C. Thomas* - Department of Business Studies, University
of Edinburgh,
Page 2
3. Retail Consumer Credit Lending Process
Application Pre-scoring Internal
Verification
data collection calculation decision
Additional
Credit Bureau Public Bureau
Credit scoring documents
data collection data collection
collection Continue
Reject
Credit Risk Credit
Risk premium Final credit
strategy agreement
calculation decision
decision signature Manual tasks
Engine tasks
Disburse Credit account
money order opening Combination
Page 3
4. Micro Finance Credit Lending Process
Detailed Pre-scoring and Public & Non-
Credit product Interest of Application
product internal Financial data
promotion potential debtor form
description decision collection
Credit Bureau Risk Premium Credit
Final loan
data files Data entry Credit scoring and collateral committee and
decision
Collection calculation loan analysis
Client signature
Client approval Paperwork Disburse finance Regular follow Behavioural
and collateral
announcement finalization funds up credit scoring
authorization
On-time Late payments Credit Bureau Soft Collection Late Collection
collection procedure score procedure procedure
Page 4
5. Credit Scoring Introduction
Credit scoring is a statistical-based technology that quantifies credit risk
Primary goal is to rank individuals, distinguishing lower and higher risks
Credit scoring was developed in order to provide
quick, accurate, inexpensive and consistent credit evaluation
Credit history or “bureau-based” scores are based exclusively on credit
record data from credit reporting agencies
Credit scores are widely used to:
evaluate and price credit based on Probability of default JUDGMENTAL vs. STATISTICAL
identify prospective borrowers for acquisition
manage existing clients and its accounts
Scoring is heavily used in banking, consumer
finance and insurance, and also in employment,
Page 5
utilities and marketing
???
6. Decision: Statistical vs. Judgmental Scoring
BOTH
Assume that the future will resemble the past
Compare applicants to past experience
Aim to grant credit only to acceptable risks
EVALUATED VALUES JUDGMENTAL STATISTICAL
STATISTICAL SCORE ADDED VALUE
Age + 10
Defines degree of credit risk for each Income - 5
applicant Marital Status + 7
Ranks risk in relation to other applicants Household + 4
….. ….. …..
Allows decisions based on degree of risk
# of Credit Aplications 6M - 28
Enables tracking of performance over time % of Avg. Credit Lines Usage + 23
Permits known and measurable …… …… ……
adjustments Total + 135
_____________ ______ ______
Permits decision automation Decision Accept Accept
PD ?? 2,8%
Page 6
7. Comparison of Individual Credit Processes
Performace Figures
500
450
400
350
300
250
200
150
100
50
0
Average processing time (minutes) Variables required (data Average costs per application Accuracy (Delinguent
fields) (USD) cases /1000)
Standard Credit Loan Granting Process with Judgmental Decision Credit Loan Granting Process with Financial and Non Financial Analysis
Credit Loan Granting Process with Credit Scoring Based Decision
Source: MFI pool
Research
Page 7
8. Statistical Scoring - Methods
LINEAR REGRESSION
LOGARITHMIC REGRESSION
CLASSIFICATION TREES
RECURSIVE PARTITIONING ALGHORITMS
LINEAR PROGRAMMING
NEURAL NETWORKS
Page 8
9. Credit Scoring Typology
Application Score - Application scores are a type of credit score used by banks and
finance houses to decide which applicants are to be taken on, based purely on the
information given in the credit application form. This scoring is heavily used during
the acquisition period of a credit life cycle.
Bureau Score - A Bureau Score is a credit score which is calculated only based on the
information from a detailed credit report. Sometimes there is a mixture of private
and public credit reports used to obtain the „bureau score“. This scoring is heavily
used during acquisition, monitoring and collection periods of a credit life cycle.
Behavioural Score – This is limited to existing client portfolio of a bank or a finance
house. This score allows lenders to make better decisions in managing existing
clients by forecasting their future performance. This score is heavily used for credit
limit renewal, credit limit increase, up-selling, cross-selling and also for the soft
collection period of a credit life cycle.
Page 9
10. Credit Scoring Data Sources (Retail)
Credit application
Banking credit history
Banking deposit history
Credit bureau report
Public bureau report
Public debtor databases
Register of pledges
Demographics
Billing file
Deal terms
Page 10
12. Concerns over Credit Scoring Influence
on the Credit Granting Process
Credit scoring may have adverse effects on certain populations, particularly
minorities
Credit scoring is not loss prevention panacea and it is neccessary to keep
that in mind during credit lending process definition and design
Some factors used to estimate credit scores may have an adverse effect on
certain groups
Automated technologies may disadvantage individuals with nontraditional
credit experiences
Judgmental evaluations may be better able to detect errors or inaccuracies
With lending and retailing becoming more automated, risky consumers will
face growing disadvantages and this may lead to some acting in the name of
social justice
Page 12
13. Conclusion
The Credit Lending Industry is an area, where RISK is the norm rather than the
exception
It is necessary to adopt many measures which may help to reduce exposure to high
risk
Those who would like to win the market battle have to find a balance between risk
and return on assets
Credit scoring is a pragmatic and widely proven method of risk identification and
quantification
The statistical credit scoring model is much more powerful than a judgmental opinion
and decision
The use of credit scoring during loan providing and monitoring is an essential feature
of a modern bank and its implementation costs are quickly recovered
Companies that are confident in their models, will start cherry picking and can target
the most profitable customers.
Page 13
14. Thank you for your attention
Tomáš Denemark
Financial Systems & Enterprise Applications Director
ARBES Technologies, s.r.o.
+420 724 096 904
tomas.denemark@arbes.com
www. Arbes.com
www.arbes.com