Business Case
Reducing SME delinquency for Central European lender
Business Challenge
The current customer management processes for SME used manual assessment with financial and risk analysis of credit exposure and repayment behaviour to identify customers who were deteriorating in their performance before taking appropriate action.
The bank wanted to implement a regular, standardised measurement of performance and risk, achieving consistent monitoring of customers, identifying those at risk of delinquency and improving the collections process to increase the recovery rate.
The Decision Analytics answer
The client chose the Customer Management system, Probe SM for Retail Banking, from Experian to implement sophisticated data-driven customer level credit strategies for SME lending.
Probe SM is an automated behavioural scoring system which enables the client to regularly monitor its 14,000 SME customers. It uses a standardised and consistent risk assessment based on all the data available for the customer including the current account, savings, loans and industry data.
The Benefits
- Significant decrease in customers becoming delinquent through early warning of risk and proactive action
- Decrease in non-performing lending ratio of 35% for small business
- New provision cost decreased by over 20%
- Decrease in exposure of 25% to risky customers
- Improved collections results through targeted strategies and focused resources
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