Zoot Hosts Executive Forum on New Credit Policy Development Strategies
Attendees learn how to make profitable lending decisions in today’s economic crisis
June 18, 2009
Zoot, a leading provider of advanced instant credit decisioning and loan origination solutions, recently hosted an Executive Forum in Cleveland entitled, “Credit Risk for Lending Decisions: Calamity to Control.”
When the market is volatile, historical credit risk model development processes take too long. In today’s economic climate, lenders need to find the right balance between tightening credit to minimize risk and continuing to lend in order to be sustainable. Attendees of Zoot’s Executive Forum were presented with an overview of the state of the current consumer lending market, TowerGroup’s 2009 trends in consumer lending, and a new model for credit risk testing and policy development that gives lenders the ability to respond quickly to changing consumer behavior.
“The financial sector has an opportunity to show responsible leadership in lending by striving to be forward-looking and making sure our business strategy is linked to our understanding of risk,” said Cheryl Feltgen, chief consumer credit risk officer of Fifth Third Bank. “I think the common thread that links risk management and marketing is the power of analytics to understand consumer behavior—from buying behaviors and intention to delinquency, default, and charge-off patterns. The end result is a better decisioning process with outcomes that are more favorable than what we have seen over the past few years. I'm excited about some of the tools we're working on with Zoot because it brings risk management and customer growth together in the same solution.”
Bobbie Britting, research director in TowerGroup’s consumer lending practice, presented the firm’s top trends in consumer lending for 2009. “Discussing the calamitous state of the financial industry is not just to cry that the sky is falling, the goal is to help lenders and the technology providers who support them build a roadmap for success,” said Britting. “Lenders need to be able to develop new credit risk models and scorecards more quickly and cost effectively than in the past and demonstrate confidence in the quality of their credit risk policies to investors who are expecting high- performance portfolios.”
The Forum concluded with a case study example of a top-10 financial institution’s dramatic time and cost savings following the implementation of Zoot’s credit risk lab solution. The solution gave the FI complete control over creating and testing new credit risk policy and producing the most accurate, predictive scorecards as quickly and efficiently as possible. The FI projected saving more than two million dollars and a reduction of twelve months off their credit policy development cycle.
“Zoot has significantly improved the credit policy development process for lenders. Traditional processes make justifying the cost and time of experimentation prohibitive, leaving credit risk executives to rely on previously proven strategies,” said Eric Lindeen, director of marketing for Zoot. “The credit risk lab gives our clients more freedom to test a broader range of attributes and develop unique, predictive credit policy, with considerable time and cost savings. Our clients have a clear advantage over competitors because they can act more quickly and respond more accurately to changing market and consumer behavior.”
For more information about the Executive Forum series, visit Zoot’s events Web page.
About Zoot
Bozeman, Mont.-based Zoot Enterprises provides credit decisioning and loan origination solutions through a configurable, scalable and reliable platform to large and innovative U.S. financial services institutions. Visit http://www.zootweb.com or call 406.556.7555 for more information.
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