zEnvisionSM Credit Risk Lab
Risky Business
During the past eighteen months, consumer behavior has veered away from historical patterns. For many financial institutions (FIs), these changes in consumer behaviors have made it impossible to accurately predict defaults and keep credit policy current. Using traditional processes to refine policy can take from six months to two years just to build attributes. Faced with this time frame, lenders can do one of two things:
1. Pull back on aggressive business growth
strategies and tighten credit risk policy indiscriminately across the institution; or
2. Deploy a new approach that allows risk analysts to make better predictions, faster.
Enter the Lab
Zoot's innovative credit risk lab is an attribute development tool and test simulation solution designed to give credit risk managers the ability to experiment with new strategies in time to respond to changing consumer behavior and make better lending decisions.
Zoot’s credit risk lab empowers credit risk managers by giving them complete control over developing an idea, coding attributes, running the attribute, and evaluating the results. The same day they come up with an idea they can test consumer behavior against it, using their own production data, and determine whether or not the proposed attribute will be effective.
Better Tests, Bigger Value
Shortening the attribute development cycle provides tremendous value to FIs because they can produce a better quality product quickly while reducing fraud and other losses and their associated costs. The non-production test environment allows them to experiment with multiple variations of an attribute, selecting only those that meet their criteria, without paying an outside source to code and test each one.
Actual Results
The enhanced testing capabilities of the credit risk lab solution enabled one leading FI to execute batch test files using each file's original date so that data does not become stale. To ensure consistent results, static files were easily accessible in a secure resubmit database. Overall, the FI decreased the time to deploy new attributes by several months. More importantly, they realized their original goal of creating a custom library of 1,500 attributes, derived from a much larger set of tested attributes, without breaking their budget. Implementing this innovative approach to attribute creation and testing has resulted in projected savings of $2 million in the first twelve months after deployment of the initial solution.
Control Doesn't Have to Cost More
These days, everyone needs to do more with less, faster. By putting risk analysts in control, FIs reduce the number of departments and steps involved in attribute development and testing. At the same time, the credit risk lab also improves the efficiency of the process by eliminating redundant coding. At the end of the day, the FI gains improved credit risk policy while cutting the cost of getting there. If your financial institution is ready to cost-effectively develop attributes and shorten the cycle of credit risk policy development, call Zoot at (406) 556-7555.
Learn More:
Download solution brochure
Download the credit risk brief "Developing Risk Policy in a Dynamic Market"
View the on-demand webinar "Take Back Control of Credit Risk Management"
Contact Zoot at (406) 556-7555 or fill out our information request form today!
