The business challenge
Data is at the heart of everything Experian does and, over the last 30 years, it has developed expertise in the interpretation and use of credit bureau and clients’ customer data for every aspect of the client relationship.
Analytics turns this data into information, which enables organisations to predict how applicants and customers will behave in the future. Experian builds market-leading credit bureau and custom scores to help clients make better, faster decisions and deliver their promise to their customers and their shareholders.
Analytics turns data into information, which enables organisations to predict how applicants and customers will behave in the future.
Application scoring in the origination process is used to predict how a potential customer will behave in the future. With this information, decisions can be made about whether to accept or decline an applicant. This view of each individual can help develop a picture of the potential value of an accepted applicant, to inform decisions about the product and terms offered.
Behavioural scoring is used throughout the life of a customer relationship to inform management strategies for each customer, whether managing bad customers or extending the relationship with good customers. For organisations that have many relationships with their customers, customer-level scoring brings together the different aspects of the relationship into one complete picture.
Collections & Recoveries
Behavioural scoring is also used to prioritise collections activities to maximise recoveries and reduce collections costs. An understanding of the customer drives collections and debt recovery activity.
The new Basel Capital Accord (Basel II) requires Banks to estimate Probability of Default (PD), Loss Given Default (LGD) and Exposure at Default (EAD) for groups of exposures. Experian has helped many organisations around the world build estimates of PD, LGD and EAD and embed them in their business processes.
"The scorecards developed by Experian have enabled us to make more reliable risk-based decisions on new applicants and have had a highly beneficial impact in reducing bad debt levels of new customers."