Business Case
Automating and enhancing risk management for a leading SME lender
Business Challenge
The small and medium sized enterprise (SME) market in Europe is thriving with more than millions of small businesses operating. The SME market is profitable for banking groups which provide most of the funding for these enterprises but, given its complexity and the strong competition, it presents unique challenges to organisations. The client, a leading SME lender, wanted to undertake a complete review of their credit processes. The aim was to review and enhance the technology, process and methodology of assessing credit worthiness to improve the consistency and accuracy of decisioning across the organisation as well as incorporating the necessary requirements for Basel II compliance.
The Decision Analytics answer
The client chose to work in partnership with Experian due to a strong history of successful projects and its expertise in consulting and Basel II compliance. Experian’s Decision Analytics business worked with the client to deliver a holistic solution with decision support tools to manage and deploy strategies for both origination and customer management. The system automates decisioning and implements a range of statistical models for credit risk, customer value and Basel II.
The Benefits
- Reduced operational costs with automation of more than 80% of decisions
- Average reduction in defaults of 30% in the first year
- Better understanding of customers utilizing quantitative and qualitative assessment
- Increased accuracy and consistency of decisions with centralised lending strategies and decentralised decision making
- Improved customer service with quicker decisions
- Meeting Basel II compliance requirements
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