zEnvisionSM Credit Risk Lab
Reduced cycle time to develop and implement custom scores is essential in the new credit world. Lenders must revalidate credit risk management scoring models that were developed before the recession and before the new consumer legislation. Being able to validate scores quickly gives a lender a significant market advantage.
—Bobbie Britting,
research director consumer lending, TowerGroup
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 toward all consumers; or
2. Deploy a new approach that allows risk analysts to make better predictions, faster.
Fortunately, Zoot’s industry experts developed a new solution that shaves months off of credit attribute and scorecard testing and implementation.
Enter the Lab
Zoot's innovative zEnvisionSM 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.
zEnvision empowers credit risk managers through tools that give 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 nonproduction test environment allows them to experiment with multiple variations of an attribute, selecting only those that meet their criteria, without paying an outside resource to code and test each one.
Actual Results
The enhanced testing capabilities of zEnvision 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, zEnvision also improves the efficiency of the process by eliminating redundant coding. In sum, the FI gains improved credit risk policy while cutting the cost of getting there.
Learn More
Solution Brochure, "zEnvision Credit Risk Lab"
Industry brief, "Developing Risk Policy in a Dynamic Market"
Webinar, "Take Back Control of Credit Risk Management"
Case Study, "Credit Risk Lab"
